Consumer spending trends, characteristics, and pricing are topics that have been previously written about on this site, as the subject is growing in importance.
An April 14 Wall Street Journal article titled “McDonald’s Cranks Up The Volume on ‘Value’” serves as an example of this subject, as it discusses various issues concerning margins, profitability and “value” in the fast food segment.
A couple of excerpts include:
McDonald’s, the world’s largest restaurant chain, with more than 34,480 locations, has been fighting declines in customer traffic in the face of lackluster consumer spending world-wide. Chief Executive Don Thompson warned that the company’s profit growth will be tempered this year as the chain sacrifices margin in order to better compete for cost-conscious consumers.
“Value is critical right now,” said Lynne Collier, restaurant analyst at Sterne Agee. “The consumer is still very weak, facing higher gas prices, the payroll tax increase and employment barely inching up. Value is the No. 1 driver of traffic, and all these restaurant companies are dying for traffic.”
A Wall Street Journal blog post of April 16 (titled “The McDonald’s Dollar Menu is Popular, But Can it be Profitable?“) discusses whether the McDonald’s Dollar Menu is, or can be, profitable.
StratX, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.
StratX, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.