"Fifty-four percent say they will raise their prices this year. They don't want to, but most will have to," Tristano said. He added that all eyes will be on McDonald's. As the chain bumps its value offerings from $1 to $1.29, it makes other brands more comfortable to inch up prices as well."
McDonald's franchisees know they have to pay to remodel and rebuild their landlord's building so McDonald's Corporation can devote their free cash flow to spoiling MCD shareholders. This writer wonders how long the company can do so. Anders Bylund - "Can You Trust the McDonald's dividend?" .
"The damage from a minimum wage hike depends on the overall labor market. If the job market is buoyant, as it is in the fracking boomtown of Williston, N.D., fast-food workers may already make more than $9 an hour. But when the jobless rate is high, as it still is in California and New York, the increase punishes minority youth in particular."
The discounting at McDonald's appears to be reaching a new level of intensity. I only follow a tiny fraction of McDonald's twitter accounts but it seems everyone is discounting everything in addition to spending millions advertising the Dollar Menu. This is just a random sample:
This is good news for McDonald’s. McDonald’s management has wasted
many millions in advertising espresso based drinks and still only sell a
hand full a day. Burger King will weaken their
position by spending their far more precious advertising dollars on
drinks that QSR customers just don’t care about.
"The Obama administration warned on Friday that across-the-board spending cuts set to take effect in March may result in furloughing every U.S. meat and poultry inspector for two weeks, causing the meat industry to shut down."
This article and video reports on analyst Andy Barish's comments about the number of arrows in McDonald's "quiver". Andy has been covering McDonald's for over a decade and knows the company very well. Usually, when an analyst uses terms like "arrows" it's code for more new products - an endless stream of new products.
McDonald's USA was better than expected at + .9 %. That's very strong considering the USA was up 7.8% in January of 2012. Oak Brook is giving credit to a focus on the Dollar Menu. That's certainty part of it but there was a massive amount of product discounting going on at a local level in January. There were many local large sandwich two-fer offers, free drinks, etc in various markets. It will be interesting to see how much this sales increase cost Owner/Operators.
"McDonald’s COO Tim Fenton said, “Our pipeline for new products is much more robust than it was this time last year. We’ve got over 180 products." Yikes! Can Tim spell slower service times? McDonald's Gives McMuffin Global Makeover:
"The fast food giant, the nation’s second-largest chicken chain, ended 2012 with $4.6 billion in sales — up 14 percent from $4.1 billion a year earlier. The company also opened 96 news stores, four more than the year before." Atlanta Journal - Constitution reports .