No one is immune to inflation and that includes the largest restaurant chain in the world. Since 2003, the “Golden Arches” has been offering a Dollar Menu that has changed quite a bit over the years. Presently, the Dollar Menu offers 13 items including hash browns, coffee, McChicken sandwiches and side salads, among other offerings.
For all the flak that McDonald’s Corporation (NYSE:MCD) gets from health advocates and others like Morgan Spurlock, whose “Super Size Me” documentary was a shocking look into what will happen to you if you “super size it” for thirty days, McDonald’s Corporation (NYSE:MCD) doesn’t need to be that unhealthy. Look, there is a side salad, just don’t drown it in ranch dressing. Additionally, there are large parts of America that are “food deserts”; areas where little more than fast food is available. You need only visit a Whole Foods and then look over your receipt in detail to see how eating like that is not a financial option for a large percentage of Americans.
Khrom Capital was up 32.5% gross and 24.5% net for the first quarter, outperforming the Russell 2000's 21.2% gain and the S&P 500's 6.2% increase. The fund has an annualized return of 21.6% gross and 16.5% net since inception. The total gross return since inception is 1,194%. Q1 2021 hedge fund letters, conferences and more Read More
McDonald’s Corporation (NYSE:MCD)’s side salad for a dollar isn’t looking that bad all of a sudden.
That said, McDonald’s just can’t ignore inflation any longer. McDonald’s is presently testing two new menus in five markets. One test includes $1, $2 and $5 fare; another has $1, $1.79 and $4.99 items.
McDonald’s have faced higher beef prices after a drought last year
“It just sounds like they’ll be raising prices,” Peter Saleh, a New York-based analyst at Telsey Advisory Group, said in an interview. The industry’s “definition of value has moved up from the Dollar Menu to $1.50 or $2.” Peter Saleh, whose nickname should be “Captain Obvious,” is right. I mean, it’s right there, and they are raising prices with good reason.
Restaurants including McDonald’s Corporation (NYSE:MCD) have faced higher beef prices after a drought last year made it more expensive for farmers to feed cattle.
“You can’t sell a burger for $1 anymore because the cost of beef has gone up so much,” Saleh said.
According to a McDonald’s Corporation (NYSE:MCD) spokesperson, the new menus are a direct response to franchise McDonald’s owners who are seeing their profit margins all but gone for them.
“An important part of this test is making sure franchisees have a strong voice in the decision-making process,” Casillas, the spokeswoman, said in an e-mail. “We encourage this dialogue and are working with them to do what is right for our collective businesses and customers.”
The Dollar Menu and More joins other changes the chain has made this year. Last month saw McDonald’s Corporation (NYSE:MCD) announce that it would begin selling chicken wings, joining egg-white sandwiches and different flavor combination Quarter-Pounders as new menu items this year.