July 10, 2012

Corn Price Gain Seen Prompting Higher Meat, Soda Costs

Growing up in small South Dakota 
towns I learned early that "Knee High 
by the Fourth of July" was more than 
just a trite saying. But it didn't 
happen this year in most growing 
areas so corn prices are rising. And 
the continuing drought will impact 
other costs.

Hedging might soften the impact but 
eventually restaurant Operators will 
have to absorb the increased costs.

That will likely happen in the fall, just about the time QSRs will begin comping against 
the warm winter weather of 2011/2012. Of course, the only answer from corporate 
marketing will be more discounting and "value". As we've written before, investors and 
analysts don't understand the impact of a warm winter. If sales soften in the fall they'll
over react and corporate headquarters will spend buckets of franchisee money giving 
away food to improve same store sales. 

Your fourth quarter and first quarter 2013 marketing calender is about to change dramatically.

>>>  Corn Price Gain Seen Prompting Higher Meat, Soda Costs - Bloomberg:


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