McDonald's Canada freezes price of small coffee and McValue meals
"And will they be willing to sacrifice? I think McDonald's is very clearly saying we will sacrifice profits and future earnings over foot traffic." Jo-Ann McArthur- Nourish Food Marketing,
9 comments:
Of course Corp will sacrifice owner profits. Its what they do. Shame on the operators who agreed to this travesty. Feckless lemmings.
OPNAD will end up endorsing this soon.
I have confidence in the new OPNAD President, Scott Rodrick. Those who know him understand he is not the type of franchisee to simply endorse an initiative presented by McDonald’s unless it clearly supports profitability. That said, I am less certain how the full board would ultimately vote on something like this.
At a broader level, McDonald’s and OPNAD should be aligned on strengthening the brand and food, not as an example building the perception that a Big Mac is only worth $2.99 and not $4.99. As a system, we have failed to materially improve value perception or reinforce food quality in the eyes of the customer.
Instead, many recent initiatives have had the opposite effect. Examples include breakfast simplification, reduceed food qaulity, products that do not travel well and further erode qaulity perceptions, FCB, Ice Cream. McDonald's does nothing or design items for delivery execution, yet delivery remains a major growth channel.
The primary tactic appears to be driving traffic by positioning McDonald’s as the cheapest option on the street. That strategy ignores a fundamental question, why are customers willing to pay higher prices and or wait 30 minutes or more at places such as In-N-Out, Chick-fil-A, or Raising Cane’s?
Those brands win on perceived quality, consistency, and execution. Until we address those same fundamentals, pricing alone will not solve our long-term traffic or profitability challenges.
Agreed on OPNAD leadership. But this pricing thing is not just another corporate initiative. No person or group will be asked to endorse it.
This sneak attack was planned and timed so there will be no discussion, no arguments, no negotiation.
In my humble opinion, it was put together by internal and external legal advisors, McKinsey (or similar consultants), the McDonald's board of directors, and PJB.
This is the most significant change to McDonald's franchisee pricing since Ray Kroc allowed his franchisees to raise the price of hamburgers from fifteen to eighteen cents.
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$5 footlong created the current Subway situation. You train consumers to never believe that it is worth paying any more.Also, you chase people will only be the least profitable customers while competitors scoop up people who pay full price
Subway franchisees at least had the foresight to band together to oppose the Subway franchisor. They even got the Subway CEO fired . Too bad the MCD owners do not see the value to band together like Subway did. The means to do that is the NOA. By the way, Subway Owners used the same Franchisee Attorney (Robert Zarco) that the NOA uses, to beat the franchisor.
69 cents a day (NOA dues) is cheap insurance to have a seat at the table. Join and support your NOA, or remain without a voice!
Did the over expansion of the Subways system (too many stores) lead to the system failure?
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Saturation leads to no profit and no equity. That leads to bankruptcy.
And every franchisee should review their franchise agreement to understand what it says about bankruptcy. Don't wait for an attorney to read it for you.
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