Maccas gets morose: The US may be in recession, with more than two million people making their first unemployment benefit claim in the past four weeks, but all McDonald’s can think about is cheeseparing and price gouging. Thanksgiving starts tonight in the US and with the country’s turkeys running scared, at McDonald’s its all about maintaining profit margins. The $US1 double cheeseburger is the top seller on Maccas six year old dollar menu (accounting for 45% of sales in this group) but its about to change forever, ruining the fast food budgets of recession-stricken Americans. Two slices of cheese and two beef patties is about to become two patties and one slice of cheese. Gallingly, starting on Monday, the lesser burger will cost a whopping 19% more than its predecessor. At a time when Maccas’ products are among the weekly staples for millions of American consumers because they can’t afford anything else, it’s a big impost.
Here’s the spin from a Macca’s executive, as reported by Bloomberg.
“Marketing will ‘feature the strength of the dollar menu brand,'” Watson said.
“We’re going to talk about the variety of items you can get at $1. The new McDouble cheeseburger “will be mentioned, but it won’t be featured,” Watson said. “What we want people to take away is that the dollar menu is still there. That is the broader message.”
Oh, dear. Who are the turkeys on the menu? McDonald’s shares closed at $US55.50 on Wednesday or 55.50 old double cheese burgers, or 46.6 of the new McDouble from next Monday.
Spam sales soar; profit sinks: As McDonald’s slashes its beef offer, could US consumers be re-assessing the cost-benefits of the humble homemade Spamburger? Sales of the tinned meat continue to boom, according to their maker Hormel Foods Corp, but the company revealed overnight that spiraling sales had failed to fully insulate itself from the GFC’s ill wind. According to the San-Diego Union Tribune, double-digit sales increases couldn’t offset higher commodities costs and investment losses. Fourth-quarter profit fell 33 percent to $67.8 million, or 50 cents per share, from $101.2 million, or 73 cents per share, a year ago, the paper said.
Dining out off the menu: Away from the New York bubble in New Jersey’s Montclair county, the local media is mourning the death of catering: A Manhattan-based chef/restaurateur told the Montclair Times: “We [normally] take in close to $500,000 in November and December. I’m talking exclusively private parties. We’ve got just over $200,000 on the books now. The business is off by 50 percent. No one’s booking anything. “I don’t know what we’re going to do.” He’s already laid off 1/3 of his staff, the paper said. The paper also cited this piece in The New York Times, bemoaning the lack of willpower among US consumers to jump in the car and drive down to the diner and this article in rival paper The Record quoting Mondo Zelaya, a 30-year New Jersey restaurateur: “I’ve never seen it this bad. Fine-dining sales are down 30 percent and pizza sales 15 to 20 percent. There are “40 percent fewer holiday parties booked this year compared with this time last year,” Zelaya said.
Thanksgiving a turkey for Illinoisians: According to the Chicago Tribune:
“A year ago, Yvonne Herman’s Thanksgiving table boasted turkey, ham, stuffing, macaroni and cheese and potato salad, all made in her Redford Township kitchen. Herman, her husband and 15-year-old daughter are driving to Tennessee this year to celebrate the holiday with her sister, but that’s only because gas prices have dropped to less than $2 a gallon. I probably wouldn’t have had the whole Thanksgiving if we stayed home,” she said. “This year, we probably won’t be buying any Christmas gifts. Herman, 37, was laid off this spring after four years as a human relations manager. Her husband works in construction.”
Meanwhile, the rich eat themselves: Forbes magazine reported earlier this month on the problems besetting the exclusive Yellowstone Club, a discreet winter wonderland for the likes of Bill Gates. It used to be “all about private powder”, said Forbes, but with the economic downturn affecting even the super-rich, it turns out that Yellowstone, in the words of its billionaire CEO Edra Blixseth, is now all about “short-term liquidity restraints.” The private slice of Montana’s Gallatin mountains and home-away-from-home to 350 extremely rich members, filed for bankruptcy this week, Forbes reported, despite a $250,000 joining fee. When the credit crisis hit, the money dried up. A $US4.5 million interim loan recently arranged through Credit Suisse was only enough to keep the club going for three weeks, leaving members clamouring and hundreds of creditors owed at least $US399 million jockeying to get their money back. The club has only money until tomorrow.
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