Thursday, December 23, 2010

The Sarcasm Report v.75

Will McDonald's kill the Dollar Menu?

But the McDonald's menu has a unique problem that chemical companies and automakers don't have to deal with. It has a Dollar Menu, a list of items with a firm ceiling on price dictated by the very name that list carries. That leaves little relief to offset costs.

Which means one of two things could disappear in 2011: either the Dollar Menu moniker, or what’s left of McDonald's margins.


Here's what's left of McDonald's profit margins. As can be clearly seen, it's a tragedy of epic proportions.

McDonald's: 20.7%
Yum! Brands: 9.9%
Starbucks: 8.8%
Darden Restaurants: 5.9%
Brinker International: 5.1%
DineEquity: 0.3%

It's a miracle that McDonald's can even stay in business with so few profits to distribute to its shareholders. How can any company survive when it earns just 20 cents for each dollar in revenue? We cannot expect McDonald's to absorb any further increases in costs. Those extra costs must clearly be passed on to its customers.

So take some extra time this holiday season to help McDonald's return its profit margins back to healthier levels. They need all the help we can give them. For the love of all that is holy, they are just shy of the profit margins over at Coach. Oh the humanity!

The recession has placed a
terrible strain on the finances of the McDonald's investors. There has been too much violence. Too much pain. But I have an honorable compromise. If they remove the dollar menu, just walk away. Just walk away and there will be an end to the horror.



There has been too much violence. Too much pain. But I have an honorable compromise. Just walk away. Give me your pump, the oil, the gasoline, and the whole compound, and I'll spare your lives. Just walk away and we'll give you a safe passageway in the wastelands. Just walk away and there will be an end to the horror. - The Humungus, Mad Max 2: The Road Warrior (1981)

13 comments:

  1. Here's a bonus heckle.

    California Pizza Kitchen: -1.7%

    How do they make money? Volume!

    ReplyDelete
  2. Crowell, Weedon & Co. Starts California Pizza Kitchen (CPKI) at Buy

    "December 9, 2010 3:23 PM EST

    The firm noted that "In addition to a rebound in consumer confidence, we also believe SPKI is well positioned to grow operating margins and cash flow through the expansion of franchised units and increased royalty income through grocery related products."


    When your negative you've go nowhere to go but up right? Why do I get the feeling that Crowell, Weedon & Co has Ken Fisher on the board!

    ReplyDelete
  3. SPKI is well positioned? SPKI? Really?

    Soup Pizza Kitchen?

    I must say that it seems like a good business model but only if they take food stamps as payment! Sigh.

    ReplyDelete
  4. I'm developing a business plan for a new chain to be called "Bread abd Gruel". Whatcha think?

    ReplyDelete
  5. Of course, the joke might be better without the topy.

    ReplyDelete
  6. dearieme,

    Bread and Gruel?

    Where are the profits? ;)

    Bread for Gruel

    You supply the bread and we'll supply the gruel!

    ReplyDelete
  7. GawainsGhost,

    I'm having a 1970s stagflationary flashback.

    You've got to be gruel to be kind in the right measure. ;)

    ReplyDelete
  8. Merry Christmas Mark!

    Gruel? I can't take another heartache.

    ReplyDelete
  9. watchtower,

    Gruel to be kind in the right measure
    Gruel to be kind it's a very good sigh
    Gruel to be kind means that they gov us
    Fed Ben, got to print gruel, he's got to print gruel to be kind

    I'm at my wit's end. :)

    ReplyDelete