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McDonalds Implodes, Reports Worst US Sales In Over A Decade
If one ignores all traditional, staple indicators of a growing economy, such as stable (not plummeting) crude demand, stable (not plummeting) holiday spending and stable (not plummeting) McDonalds comp store sales, then indeed the US economy has "decoupled" from the rest of the world, and those who wish to demonstrate the same intellectual capacity as Tim Geithner, will welcome you to the (latest non-)recovery.
And yet for those, who are leery of seasonally-adjusted government data (showing soaring low-wage jobs offset by crashing employment in the energy sector and M&A synergies which mysteriously are never captured), or sentiment surveys and confidence polls (of Wall Street executives and government workers), here is the latest data from McDonalds. Showing the worst US comp store sales in nearly 12 years at -4.6%, one does wonder if following America's inability to even pay for sub-$1 meals, mass starvation will follow?
McDonalds US comp store sales:
McDonalds global comp store sales:
And for all those who are blissfully ignoring the impact of the soaring USD on corporate profits, here is a wake up call from McDonalds:
The following items are expected to negatively impact fourth quarter results
- $0.07 to $0.09 per share due to strengthening of the U.S. dollar against nearly all foreign currencies
But... but... lower oil prices!?
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Maybe they pull a BK and bring back something that was available before I was born? What would that be...real food?
I was thinking of the Yumbo. Long MCDLT!
BK has done a good job turning around a failing company; firing the dirty, pimply workers and hiring friendly fairly good looking people, improving their menu and cleaning their stores has done alot for them in my area. McD's run from extremely poor service to pretty good service. However the food quality has not changed. Some of their ocunter people are so obnoxious it's hard to beleive they are not fired on the spot. You'd think they were federal employees!
Wrong analysis, again...
It's got nothing to do with affordability or purchasing power.
Look at places like Chipotle or Chick Fil A... they are more expensive and PACKED all the time.
Actually some places in my neck of the woods have never been so busy.
So, yeah, I know what Zero Hedge wants to show McDonald's results, like every other data point out there really, as a sure sign the economy is dying, but I actually think it's the opposite... people are going to place that are more expensive.
exactly...i wll spend 5 to 7 bucks more all around for less salt n shit...at least I can ID what I am eating at Chipolte or even at Jason's Deli or something. Value added bitchez.
thanks for the down vote douche wad...You are probably sucking back a Starbucks latte mocha Frappuccino salted caramel Venti right now...trying not to deal with the cognitive dissonance that you are drinking an overpriced milk shake. fucker.
Mickey Dee won't rally until peppermint shakes are featured in their T&V commercials....Their ice cream cones were the best dog treat they ever sold at the Drive-Thru.
Will MCD be the next White Castle?
then sleep well and dream well, if you are convinced, that us economy is sound.
What does this mean?
Expect the DJIA to drop McDonald's soon and add Chipotle.
THey'll call it an improvement to reflect the new habits of Americans.
But it's just to get us to DOW 20K sooner.
I wonder why they just haven't made the DOW indexed to whatever stock they are pumping on a continuous basis?
Bring Back the McRib!
/s/
fuck McChucks
That is going to put a big hurt on the part time job gains I would think....
The BLS will spin it as a "positive" when the Dreamers are shitcanned, and replaced by burger-bots.
One can only hope this sick, materialistic, society finally comes to its senses and just quits buying more crap from China. New MiJo tennis shoes for $300, and ghetto stores have riots. A new Escalade in front of the apartment, but the entire family is on welfare. Maybe McD’s is the canary in the coal mine, or else the fools have just switched to Chipotle $8 burritos and their new MasterCards?
From last year;
"There has never been such a push to get Americans to go further into debt and buy things they don’t need and cannot afford"
Newscasters Agree: A Christmas Present Or Two Or Ten Edition
MCD serves food? Who would have thought. Shows the taste Ameikans are used to and subjected to. Crap Food MCD
Not sure who needs to be hanged first. Rothschild and all of his banking minions or the heads of Monsatan with their GMO nightmare.
Relax there Lysenko, the sky isn't falling.
I'd sit and say 'who eat's this crap?' but I have to admit once in a while, I like to wake up and grab a couple sausage egg muffins. Not often, but I think they just got way too big and the only place to go is down. But, you have to give the corp some credit, that guy made a movie about how eating there made his health so terrible, and somehow that increased thier sales.
They don't take EBT cards?
Uh-oh. Bonuses are in danger. Can we just replace the 'food' with plastic?
Will sawdust and entrails do?
I don't live in NA.
What is going on with McD's?
Is everyone so broke they won't even eat there?
People think it is poison and now they go to Chik-Fil-A?
The pink slime and other documentaries have even the poorest going elsewhere?
No one wants GMO? But eveything ELSE in NA is GE...
Is McD that bad now? Garbage food, high prices, dirty, lower class like Dairy Queens?
I thought all the EBT's worked at fast food joints...are the Section 8 demo now too rich for McDonald's and use their card elsewhere?
I like your question. I would think a lot of people would give you different answers, but I can only give you mine. As a population ages, your take on things also change. A company isn't the same after 20 years no matter what they do to try not to change. Even if Mickey D's never cheapened their food and kept quality up, and raised prices as necessary, the impression over time would change along with the times. Then there is the competition, and what that does to people subconsciously. I've come to look at McDonald's as just another place to get just another sandwich. Just because its been around so long has not endeared it to my heart. What is used to represent, well; my thoughts of that have changed. No loyalty has been produced in me just by its mere continued existence. The simple explanation is that the food industry has multiplied various franchises of everything imaginable out there, and to stay the same to compete with ever changing offerings would be a challenge to any industry. Lots of them have already come and gone, food business and otherwise. I would consider McDonald's to be a relative success, even with their dwindling sales.
Truely unsettling. I always think Big MAC is as American as Apple pie.
This is the inevitable outcome of modern American corporate businesses.
After decades of cutting corners and sacrificing quality for gaining an extra penny per sale, the quality of the product is no longer fit for consumption and is literally killing customers. And the customers are waking up to the fact while others are so poor from this slash and burn economy they can't even afford their own rat poison.
All this despite the great regulatory and monitoring apparatus of the government which was supposedly the only barrier from this happening.
Actually, with its Dow chemically processed shortening over real animal fat and the push to replace real fat with chemically processed corn syrup, the government has worked hand in hand in killing McD's customers.
Remember when the collapse happened so long ago?
Good comment. Sometimes (more often than not), these companies forget where they came from.
SOME folks are returning to cooking real food for themselves? Just maybe?
Ramen mostly.
Proposition the cash register jockeys for a ‘side’, if you will. $20.oo is a lot of moola to them.
MCD has entered the consumer's twilight zone along with Sears: they should both go dark and start over.
Why eat at McD when there is online? isn't that a new justification slogan for everything?
Has any one tried stuffing a turkey with a Big Mac?
Battering it and deep frying it would be a hit with the carneys I bet
I'll be back when they replace all the slim shady wannabes with robots.
Smaller, nasty burgers at a higher price. Who knows what the problem is?
"Try our new Crude Oil McShake!"
MCD stock has flatlined:
http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=mcd&insttype=&freq=9&show=&time=1
Good news. Thank you, Putin.
McDonald's doing well in Russia
U.S. East Balt Bakery Maker Of McDonald’s Bread To Quadruple Russian Investmenthttp://newworldorderg20.wordpress.com
They'll get over it.
Put it down to Peak Obesity
If MCD made decent food the way they used to, with stores that are clean like they used to be, with employees that don't say "Choo want sumpfin'?" then there would be no problem.
Don't need a goddam MBA to figure this out.
They should stick to their older basic menu.
Or, invent a replicator that can use 1 base formula to create each item on the menu. That way, the food stock could come in sacks or 5 gallon cans, and they just use a robot to hook up the hose.
Automate, get quality food, problem solved.
Having eaten McDonald's "food" off and on for too long a time (much, much less frequently, lately), I can say without a doubt that killing off the dollar menu is killing Mickey D's. No matter what they put into it, the double cheeseburger was viewed as a strong value proposition, especially for po' people wit kids.
They killed the double cheeseburger, first, by eliminating a slice of cheese (used to be two), then raising the price to its current 1.29 or thereabouts. Also, McDonald's pricing is not uniform, especially when you get out of the city and onto major highways. Prices are jacked up on the interstates.
Although it's hard for many around here to understand or admit, poor people are smarter than the whiz kids in McDonald's marketing believe. They know they're eating shit, but when the shit is cheaper at Wendy's or Booger King or you can microwave the same shit from a dollar store, McD's gets the shaft.
Additionally, the push for a "living wage" has made McDonald's the poster child of the greedy corporation (and, BTW, they are cynically greedy), which isn't helping sales one bit. It dovetails with the whole anti-cop, Ferguson thing. If black people stop eating at McDonald's as a matter of conscience (which may be happening), it's Katie bar the door and you'll soon start seeing shutdowns everywhere.
Another item worth mentioning is the utterly plausible corporate squeeze play. Whenever there are more than two major, national competitors in a space, the third or fourth is sure to get slammed. The best example of this is what happened in the office supplies space. There was Staple, Office Depot and OfficeMax and not room for all three to survive. Office Depot took out OfficeMax in a buyout, and now there are two, just like Coke/Pepsi, Home Depot/Lowe's and other spaces where there simply is not enough volume to support three major players. Wal-Mart crushed K-Mart, leaving just Wal-Mart as the main discounter, which is where sci-fi writers have all predicted to be the final outcome. One major player per space, crowding out all the rest.
In the current burger wars, Wendy's and Booger King are putting it to McDonald's. I'm going to short the shit out of MCD and, in my cynical strategy, will be looking for more squeeze plays.
Time's getting short when Wal-Mart and McD's are both showing worse same-store sales quarter after quarter.
BTW: Fuck McDonald's, Wal-Mart and any other Fortune 500, S&P 500 company and many of the other wannabee's on the NYSE or NASDAQ. They're all Wall Street-bankster creations that deserve to die slow, painful deaths, to the delight of cynical bears everywhere.
Excelsior! I'm lovin' it!
Your whole thesis is consumers, especially poor consumers, are smart. That tells me you are some dopey liberal who believes what the media and pee aych dees tell you.
80-90% of people are sheep. If they stop buying McShit, it's not because they suddenly became smart consumers, or suddenly realized they're buying pink slime, salt and high fructose corn syrup.
McShit has been slowly jacking up their prices and marketing to black people. They hit a wall. They simply need to redo their marketing. A new wrapper on pink slime sandwich and they can call it new and improved. That is what American business does -- they take crap and market the hell out of it so idiots will get suckered into buying.
The one thing I will agree with is there are plenty of choices for poor fat people looking to eat shit. There's a consumer boredom factor here too.
MCNUGGETS ARE MADE OF PEOPLE!!!!
The two McD's near me are always slammed at lunch and around 5 pm. Seems like everyone who still has a job eats out at lunch everyday.
At my last 2 jobs, I was one of the only people who didn't eat out every day.
I think the decline is more due to people not buying that food, rather than not eating out.
I think you are right on the mark. People haven't stopped going out for lunch, they just eat elsewhere.
Agreed, there are better alternatives in the fast food market and when Coca Cola catches a bad quarter, its customers will be reporting the loss of a limb!
They've penny pinched so much over the last 5 years that many have noticed, hence the sales impolsion.
Ever tried to use one of their napkins, it's like cheap bog roll was in the 1970s/80s, ie shiny.
Still, the breakfasts are good and also value.
One would think that McDonalds would understand their market and their competition, but I do not think that they really do.
It seems that for years, McDonalds has tried to be all things to all of the fast food crowd, thinking that their name would bring in people to try more upscale sandwiches, coffee and treats. Subsequently, they have been clobbered by the Dunkin Donuts and other chains that enjoy moving in next to McDonalds and differentiating themselves from McDonalds... typically with slightly more upscale and custom fare.
However, what works for Dunkin and 5 Guys won't work for McDonalds. McDonalds can't truly upscale because the vast majority of people cannot conceive of McDonalds being upscale. McDonalds is perceived as a mass production chain with consistent food that is OK, but not especially desirable if someone wants a little better meal.
I eat the $1 breakfast burritos from McDonalds (the only thing I eat from there unless forced to), but I won't pay $2 even to try the chorizo burrito because to me any value add would be minimal for double the price (but I am willing to buy the coffee from McDonalds which should be high margin for them). Would I pay $2 for a breakfast burrito from Dunkin, if I went to Dunkin? Probably... and therein, IMO, lies the trap for McDonalds. If they raise price (too fast) they lose customers. If they try to upscale they have difficulty getting traction on the new items because of perception. If they add more stores, they saturate and get diminishing returns on low density or low ability to pay franchises.
But, they cannot just buy a higher value chain and McDonaldize it because that defeats the value proposition of the higher value chain. Common problem ... typical answer is to do what you do best and bang it out there. Only add products that are consistent with the existing value proposition. But, then what would all of their geniuses do who are trying to figure out how to get McDonalds upscaled? LOL
McD could have tried the upscale route, instead they chose to go ghetto. Any attempt to deviate from that now will be decried as rayciss.
"thinking that their name would bring in people" I agree with your comment. The only people I know that get excited about McD's food are under 5 years old. I'll experiment with a new venue before I go to McD's.
"I eat the $1 breakfast burritos from McDonalds..."
I can't believe people can actually stomach McDonald's food -- any of it, ever, even once. I'd rather fast. Why not just eat a carrot?
MCD used to be a good bellweather, but thanks to better competition aka "tastier fast food at similar price point" this is a problem with MCD, not people being too poor for McDoubles.
"mass starvation will follow?" Only in the cities. The much despised flyover country, where stuff is really made and grown, will take case of itself and the people who live there.
1) MickyD's is not a food company, it's an entertainment company, and the entertainment brand is very shopworn: the color scheme, the clown, etc. While little kids still get hooked on the precisely calibrated taste blends of fat-salt-sugar, it is increasingly transient experience as all the other competitors know how to do this also. Plus people are really waking up to the link between nutrition and obesity.
2) mickyD's strong suite back in the day was consistency and cleanliness. A customer could always count on a scrupulously clean, hygenic 'dining' experience and a menu that was "always the same everywhere". No more. I think the parent corporation does not police the franchisees as thoroughly as it did 'back in the day'.
3) With so much bad press about pink slime, etc, MickyD's is now a last ditch, 1130 PM lonely highway kind of place to eat, with a guaranteed greasy oily salty dirty depressing experience.....
Here in Brasil Mcd's is twice as expensive as the local fare. Actually caters to a high class clientelle. "being seen as "american" still has clout here. Of course the local faire is much, much better, but McD's is Modern plastic with colors and clean bathrooms, whereas the local serve great food at half the price on cheap white plastic and very dirty bathrooms. It's about $8 for a mcfish meal, regular size with fries and drink, or local $4 for awesome fresh homemade beans (fejao), rice, beef, chicken, vegies.on and on.
I sometimes eat at McD's for the ketchup. lol. It's true. But recently the odd fishy flavor has managed to permeate even that ketchup flavor and I can't help wonder where this fish came from and it's journey from the sea, thousands of miles away. In Brasil, it is required that any frozen product be defrosted and refrozen over and over until it's a icy crystalized mess. I swear, even the Hagen Daz has a thick icy top crust of melted and refrozen. They might use refrig trucks, (although they might not) but the stuff gets unloaded and sits in the dock forever, while the brasilians are off eating food cooked that day and watching real football and chasing the gorgeous women. I don't blame them, but I wonder if the MdD's irresistable force of corporate standards can overcome the imovable Brasilian focus on fun. I would bet good money that even McD's stuff sits around on docks and trucks and driveways defrosting, getting yucky. Hey, but with enough ketchup, anything can taste good. Viva Ketchup.
Hey, those raises to 15$/hr aren't gonna help!
Washington State: Big Macs are now 19.95$! On Sale!
Short answer: Dropped McD's, now eating PDQ, Steak N Shake, Wendy's, even Checkers when we go slumming.
In 1968 the #1 chain was Howard Johnson's. Where are they now? The public's tired of the clown. Maybe they should replace him with Tim Curry's Pennywise.
The public is tired of the gay clown.
No not Apple.
Perhaps the reason sales are down is because the economy has been creating mostly part-time jobs and those people don't need to go out to lunch. They just go home.
Yeah, because no one would ever go to McD's unless they had to go back to work afterward.
What???
McDonald's is also posting calorie content for all of their burgers and meals now on the overhead menu, at least here in the US. I think that fact is driving sales down, pretty much the reason they never wanted to mention calories until the public demanded it.
I was hungry last week and running late so I walked into a McDonald's and saw their menu, combos with 1350+ calories in them! I was like "Are you fucking kidding me?", I make a nice meal at home that will have around 400 or 500 calories, full of natural whole grains and really filling for hours. Then there's this cruddy slime sandwich and greasy fries that are THREE TIMES the calories of a healthy meal!
I turned and walked out. I'm glad more Americans are dumping these fast food lard peddlars, making us all get fat and then call us lazy slobs! When who would have guessed there was this much trash in their "food"? Now that people can see the calories on the menu, I think fewer and fewer people will choose to eat this junk.
And no people aren't making healitheir choices. They're just SO broke they can't even afford junk food.
"...one does wonder if following America's inability to even pay for sub-$1 meals, mass starvation will follow?"
No, what one actually wonders is whether American tastes are beginning to shift away from complete crap like McDonald's, and toward more healthy foods?
Also, it is well-known that McDonald's (and other "discount" crap stores like Walmart, etc.) does well in economic slumps, when people are poorer, and does poorly when people are confident and spending more money (on better food.) So bad news for McD's is bullish for the rest of the economy, not bearish.
In short, the author appears to be a nitwit.
This and the rest of the Fortune 500 is why TPTB want bazillions of Mexicans to stream over the border. They will crank out mass numbers of children who will buy lots of Happy Meals...
I bet this news about Mcdonalds coincides pretty close a top in the DOW/S&P,etc ... it's pretty hard to argue with the numbers coming from a bellweather like MacD.
I agree with Mish. McDonald's prices are no longer competitive, compared to other local choices with superior food. If they can't compete on price, they can't compete at all, imo.
http://globaleconomicanalysis.blogspot.com/2014/12/off-menu-mcdonalds-us...
Tyler,
ZH has posted several articles concerning MacD's slow downward path... wonder if this is happening to other fast food outlets like Wendy's, Jack in the Box, Burger King, etc. Do statistics show this to be the trend for all "fast food" outlets? Are there some winners, like Mexican fast food outlets taking the business from MacD's?
Thanks