March 2, 2018

Analyst David Palmer Loses Faith In $1,$2,$3 Menu

Usually a McDonald's cheerleader, Palmer is concerned about a slow start to 2018.

Lack of appetite for the Dollar Menu sinks McDonald's shares


Anonymous said...

After 2019 share price should settle in at $100-$115 as McDonald's pays their share of reinvestments that have little return i.e. ripping up floor tile in a four-year-old lobby I could go on. OPNAD only has one way to drive customers discounting that gets old and tired nobody is going to pay $5 for a burger when I can get stuff for $1 & $2. Worldwide McDonald's has real estate tenure issues; Sout East Asia is their best growth market but they are losing traction. The fun will start in 2019-2020 when these clowns have stock options out of the money

Maybe Ricard would know more how long the vesting period is for McDonald's corporate employees and then the exercise period they have?

Anonymous said...

Stock has peaked. Im selling NOW

Richard Adams said...

Sorry, I'm not a good source for information about McDonald's corporate employees. I have no connection or communication with such people. I do like to point it out when insiders cash out on their options or sell shares. But, that's very public information and doesn't include the underlying details about each individual's options. At least I've never seen it.

But I agree entirely about the weakness of the discount menus. In a saturated, overbuilt industry doing the same thing as everyone else isn't going to attract much traffic. These are different times. When the original $1.00 menu was launched in 2002, because of sheer marketing muscle, McDonald's was able "own value". Now everybody's doing it.

Do consumers see a difference between $1,2,3, four for $4, or the various 2 for $4 or 2 for $5 offers? Doubtful.

Unless I'm checking out a new product my usual meal at McDonald's is a Mc Chicken and a $1.00 ice tea. But lately I've been sampling a lot of unfrozen QPCs and one really notices it when a single sandwich is $4.50 to $5.50 or a single meal combo wipes out most of a $10.00 bill. It wouldn't be nearly as noticeable if the $1.00 & $2.00 options weren't available.

Anonymous said...

What McD’s breakfast lacks is innovation. No news, just tired old stuff. Steady stream of simple and new products, (NOT entirely new lines...use what we’ve got or add a sauce or something) would have helped immensely.

Regional flavors would help too. Why are they so obsessed with the same thing everywhere? BOORING. Customers LOVE regional tastes.

Anonymous said...

They have carved the Heart & Soul out of this business and ATE it.

They want more kid business, then Fire Ronald McDonald.
They want more family business ,then remove playlands
They want faster D/Ts, then add to the McCafe menu and Add fresh beef.
They want higher Cash Flow, then add Labor to the Dining room to teach people how to use a Kiosk, and do table service.
They want better Operations, then let Operators grow to 20, 30, 40 & 50 Stores.
They want us to give Gold Standard everything, Yet their Communication & Technology is No Standard (total failure)
They want us to give Table Service, yet I would be happy to have people just to give Service.
They want Better Advertising, but Create an Ad Agency from 2 Old Dried Up ones.