"McDonald's reported a weaker-than-expected rise in October sales at U.S. established restaurants as high unemployment keeps plaguing the world's largest hamburger chain's key domestic market.
McDonald's said sales at restaurants open at least 13 months were up 5.6 percent in the U.S.
October sales at restaurants open at least 13 months were up 5.6 percent in the United States, but missed some analysts' estimates. Oppenheimer's Matthew DiFrisco, who had expected a 7.1 percent rise, said analysts on average had expected a 6 percent increase.
"They slightly stumbled in the U.S.," DiFrisco said, but added: "I don't think anyone is significantly changing their investment thesis on this number from one month.""
Is this trend that the McDonald's Corporation is experiencing a result of an increase in demand for healthier, organic foods? Or is it really the opposite of the accepted idea that fast food is consumed by the lower middle-class and below because of it's low production value and cheap price?
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ReplyDeleteFast food has always been cost efficient; it doesn't take any time to order from a drive-thru and receive your food, while actually cooking a meal at home takes time and going to the grocery store to buy all the ingredients ahead of time takes time out of your day too. There is an increase in demand for healthier foods but McDonalds has improved their menu to attract to the healthy side of the population. Whether going healthy or not, a majority of the working class and the lower middle class find themselves at a fast food place at least once a week.
ReplyDeleteMaria you are absolutely correct that either way people end up at McDonalds; after all they did experience more than 5% increase in sales. However, what do you think might be the reasoning behind sales increases not meeting expectations? I'd put forward that despite McDonalds low prices, eating at home is still more cost effective. Therefore, people who are feeling the brunt of the economy's recession are saving money by returning to their dinner tables.
ReplyDeleteThey say a 'weaker than expected rise,' which means that it is still rising, only not as much as they'd like it to be.
ReplyDeleteI agree with Maria. However, I'd be more interested to hear or like to know what is the correlation between the income and the fast food industry whether there is a connection or not. But I am not surprised that fast food industry will always do well in recessions.
ReplyDeleteAlso, I heard that San Francisco banned happy meals for kids (obviously). I wonder what is the consequence of that for McDonald's if that were to happen in every city.