“The context is since October of last year, you’ve had lower grocery prices than restaurant prices. And when prices are cheaper at grocery stores, low-income households go there. When McDonald’s is cheaper, they go to McDonald’s,” Wedbush restaurants analyst Nick Setyan said.
But fast-food chains could see a boost early next year, he added. “Prices at the grocery store aren’t going to continue to deflate, and restaurants are going to figure out how to price their offerings the right way.”
So, they’re planning on not lowering prices but instead waiting until folks can’t buy groceries so they come back to where they can afford to eat. Most likely also collude with other brands so they also won’t lower their prices.
The blasé tone in which they describe a business strategy of ‘the poor will come back when they have nowhere else to go’ is horrendous.
Also, the soulless analyst’s name is Nick Satan, this existence can’t be real.
The franchisee pays McDonalds for everything. McPatties? Gotta buy them from McDonalds Corp. McDrinkCups? Gotta pay Ronald his royalties. Uniforms, menus, etc etc.
But what is the most valuable part of this McSupplyChain? Its probably the franchisee agreement and the real estate.
Groceries are expensive but the margin on groceries, the actual profit per product, is ridiculously low for the retailer. They make up for this low rate of profit, with volume, getting 1 to 3% profit on each cart of groceries is feasible when you’re serving thousands of customers a day.
Costco only has a 2.5% profit margin for example. And that is with lots of store brands, and very shrewd negotiating to get massive volume discounts.
So, they’re planning on not lowering prices but instead waiting until folks can’t buy groceries so they come back to where they can afford to eat. Most likely also collude with other brands so they also won’t lower their prices.
The blasé tone in which they describe a business strategy of ‘the poor will come back when they have nowhere else to go’ is horrendous.
Also, the soulless analyst’s name is Nick Satan, this existence can’t be real.
Death to Amerikkka
Remember, McDonalds Corp doesn’t make money off of the sale of a burger. They make money off of real estate and franchise licensining agrements.
I believe they also make a portion of each burger sale
The franchisee pays McDonalds for everything. McPatties? Gotta buy them from McDonalds Corp. McDrinkCups? Gotta pay Ronald his royalties. Uniforms, menus, etc etc.
But what is the most valuable part of this McSupplyChain? Its probably the franchisee agreement and the real estate.
Mcdonald’s is a real estate company. The New York Times is a gaming company. Delta, American, and Southwest airlines are credit card companies.
Soooo if their insurance premiums were to go up… that would really hit them where it hurts? Hold’s up bag of sugar over cement mixer
Wtf, fast food used to be cheaper than groceries in burger land?? Backwards ass country
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Groceries are expensive but the margin on groceries, the actual profit per product, is ridiculously low for the retailer. They make up for this low rate of profit, with volume, getting 1 to 3% profit on each cart of groceries is feasible when you’re serving thousands of customers a day.
Costco only has a 2.5% profit margin for example. And that is with lots of store brands, and very shrewd negotiating to get massive volume discounts.
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