Coalition of Franchisee Associations

July 19, 2012

It's Going to be a Hard Candy Christmas?

When announcing "disaster" areas due to the drought USDA Secretary Tom Vilsack
said: "ranchers were most seriously affected and he expects the prices of beef,
poultry and pork "may go down a bit, but over time they will rise."

In other words, restaurants may get some relief this summer but just about the time
the industry comes up against the tough comps caused by the warm weather of
winter 2011/2012 the corporate folks will be pushing for discounting and coupons to
keep same store sales from going negative.

Yikes!

Dow Jones Reports HERE
.

4 comments:

Anonymous said...

JUST had an ROA where a McD talking head ASSURED us that commodity prices were under control, no need to worry here. Also he expressed that the recent law in New York limiting sugary soft drink sizes was NOT a concern. (It has since spread to four other towns with others considering the same.) Sure glad Oak Brook has such an accurate Crystal Ball.

Anonymous said...

http://www.burgerbusiness.com/?p=11365&utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+burgerbusiness+%28%CE%B2urger%CE%B2usiness%29

Richard Adams said...

Thanks for the link!

Richard Adams said...

The McSpin from McDonald's corporate for Operators is most
often identical to that presented to the investment community.
It's all slightly delusional because it's based on what they want
to have happen in the future, not what can be logically expected.

If they want you to plan for a lot of discounting they'll tell you
back door costs will not be a problem. And they'll tell the
analysts the same thing to keep them from worrying about margins.

Of course, the little secret is that Wall Street likes higher
commodity prices (in terms of investing in restaurant chains)
because franchisees have to raise prices and that increases
corporate income. This is especially true at McDonald's now
that there are less McOpCos, and why many QSR chains
have had a "refranchising" program over the past few years.