Know Your Fast Food Psychology: McDonalds and Inflation|
Inflation has made the Dollar Menu an unprofitable but necessary evil. The latest tweaks to McDonald’s value menu won’t change that.From Fortune.com: written by Howard Penney and Rory Green, Hedgeye
Some incremental changes are coming to a McDonald’s menu near you – what are the implications?
Later this month, McDonald’s will change some of its Dollar Menu items and it will begin offering an expanded value menu, including 20-piece chicken McNuggets, double cheeseburgers, chicken snack wraps, and Angus snack wraps, according to Reuters.
As we learned in a conversation with the company, McDonald’s is focusing its menu on four tiers (not including combo meals):
- Premium: $4.50-$5.50+
- Core: $3.50-$4.50
- Extra Value Menu (new): $1.20 to $3.50+
- Dollar menu
In trying to understand the implications of what McDonald’s is doing, a restaurant industry consultant and associate of ours had this to say: “I get a kick out of these corporate guys at Wendy’s (WEN) and McDonald’s pretending they have some magical formula for value pricing. It’s 100% driven by food costs and customer behavior.”
[to read on, visit Fortune.com]