Thursday, March 15, 2012

OMG: Bernanke Inflation Hits McDonald's; They Are Going to Replace Dollar Fries with Baked Cookies

Fortune reports:
Inflation has made the Dollar Menu an unprofitable but necessary evil. The latest tweaks to McDonald's value menu won't change that.

Some incremental changes are coming to a McDonald's menu near you – what are the implications? 
Later this month, McDonald's will change some of its Dollar Menu items and it will begin offering an expanded "value menu" [to compete with its pulverized dollar menu]....

Given that McDonald's (MCD) is seeing increasing inflation in 2012, we believe the company is trying to manage its margins by forcing consumers to trade up to the "extra value menu" from the "dollar menu." This makes more sense when we consider that one of the biggest changes is to remove small drinks and small fries from the dollar menu and replace those items with fresh baked cookies and ice cream cones.
This is high grade stealth price inflation. The price inflation is accelerating. Will the BLS catch it? Or will they call a baked cookie a perfectly good substitute for french fries?

7 comments:

  1. All of the chain fast food places are doing this. I just ate at an Arby's tonight and the meat was about half as much as it was the last time I went to one a couple years ago. Instead of raising prices, they are just giving us less food because the idiot consumers will blame the restaurants.

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  2. PSA: THIS IS ONLY TRANSITORY. INFLATION EXPECTATIONS REMAIN MODEST. REPEAT THIS IS ONLY TRANSITORY AND WILL PRICES WILL MODERATE TOWARD Q3 WITH THE RETURN OF FRIES IN Q1 2013.

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  3. Select one unhealthy food with another. Ha that will make us all feel better and healthier and poorer too.

    Good health care anyone?

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  4. I used to have these ready-made Taquitos. They used to be really good and had a lot of meat in them. About a year ago, they started to be really empty. I looked inside and there was a lot of empty space in each one where meat was before.

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  5. Beat them at their own game --- stop going !

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