September 27, 2012

Durable Goods and McDonald's Sales

It was at least twenty years ago that our Co-Op saw a presentation from Oak Brook
"experts" who observed that over the years McDonald's benefited from an increase
in durable goods orders in the United States. Hedgeye Research just released a report
charting durable goods since 1997.

The HEDGEYE report is HERE

(Clicking on the chart brings up a larger and easier to read version)

Durable goods were generally positive in the late 1990s but McDonald's missed out on
that trend because of the cannibalization of the Convenience Strategy and the impact
of slow service times resulting from "Made For You". The increases beginning in 2003
are reported to be because of the "Plan to Win" but it looks like durable goods might also
have contributed to this success. Durable goods took a huge dip in  2009 and that was the
softest year out of the last ten for same store sales at McDonald's USA. I've made the case
that sales were poor in 2009 because McDonald's Operators wasted their advertising $$$
on espresso based drinks. But, there were strong economic headwinds.

While sales at McDonald's USA don't track perfectly with durable goods it's an interesting
metric to watch.

September 25, 2012

Technomic on Better Burger Restaurants

Better Burger Restaurants - A Growing Trend:

IFA Leads Coalition to Defeat Michigan Bill

The entire purpose of the International Franchise 
Association is to defeat any Federal or State legislation 
that might give legal rights to franchisees. 

Of course, McDonald's Corp. is a major player in the IFA.

From the IFA's Blog

Are Franchisees Entrepreneurs?

Franchisees Are Entrepreneurs (Let The Debate Begin) - Forbes:

80 Mill Hours Needed for Obamacare Tax Rules

80 million hours needed for Obamacare tax rules | Times 247:

Tax Penalty to Hit Nearly 6M Uninsured People

Tax penalty to hit nearly 6M uninsured people, under ObamaCare | Fox News:

Fast Food Restaurants Serve Quick Breakfast Options

Fast Food Restaurants Serve Quick Breakfast Options - QSR magazine:

McDonald's Fights Slowdown With Value Initiatives

McDonald's fights slowdown in Europe, U.S. with value initiatives | Nation's Restaurant News:

McDonald’s Fattens Dividend By 10% to $0.77

McDonald’s Fattens Dividend By 10% to $0.77 - Income Investing -

September 13, 2012

Jan Talks PFEs

Leaks about McDonald's marketing plans usually come from the various ad agencies.
This time it's Jan Fields on national TV divulging OPNAD's promotional food events.

CNBC video is here >>>  Jan Fields Unplugged

Howard Penney at Hedgeye Tweets...

September 12, 2012

Bigger is Not Better

It's long been my position that one of the reasons McDonald's dominates
the QSR industry is that McDonald's Operators in the USA have a
relatively small number of restaurants in a defined geographic location.

The article below features a Burger King franchisee who owns 400 Burger
Kings spread between Dallas and Orlando, 50 Arby's and Popeye's in Texas
He also owns most of the CiCi's in Houston and 33 Golden Corrals.

How can a such a franchisee compete with a bunch of six store McDonald's
Operators in his markets?

Good for him that he owns hundreds of restaurants but this is the reason
visits to Burger Kings are usually a disappointment.

Guillermo Perales is profiled HERE

September 11, 2012

McDonald's Sales Bounce Back on Value Deals

"McDonald's has been intensifying its "messaging around value," noted Andy Barish, a 
Jefferies analyst. For example, he noted that the company ran promotions for its breakfast
Dollar Menu in mid-August."

The Associated Press: McDonald's sales bounce back on value deals:

September 7, 2012

Wendy's Breakfast Faltering Again?

Analyst - Wendy's attempt to sell breakfast may be at risk

Caution - Sales Bump Ahead

This chart from a recent Hedgeye note on McDonald's illustrates the hill that McDonald's
and other chains have to climb this winter. The blue is the past 12 months and the red is
an average of the past two years. Of course the highest increase was in February partially
created by a 29 day month. (For a larger picture click here) >>> Hedgeye Chart


September 6, 2012

Streamlined Fast Food Menus Attract Customers

Readers of QSR Magazine will be familiar with the monthly column written by former
McDonald's marketing guy Roy Bergold. This month he discusses menu proliferation.

"Expanded menus really mess up your QSC and Value."

Streamlined Fast Food Menus Attract Customers - QSR magazine: