By John Q. Hosedrinker McDonald’s stock price has experienced a drop following the CEO’s promise to focus on affordability during the latest earnings call. As an individual with my own insights and opinions, I can’t help but reflect on this news and express my thoughts on the matter.
First and foremost, it’s frustrating to see McDonald’s wasting their time with these “designer meals.” These meals are essentially the same food with a fancy label and a 20% price hike. I mean, come on! The Filet-o-Fish has become so small that it might as well be called a Slider. It truly feels like McDonald’s has recently moved away from affordability, only to now crawl back to it. This inconsistency in their approach is puzzling.
Now, let’s talk about the impact on the stock price. It’s important to note that a 1% drop in the stock price over the last week and a 7.5% increase over the last quarter is not groundbreaking news. People in the financial world often fail to understand the reality of McDonald’s and fast food in general. You simply can’t charge sit-down restaurant prices for a mediocre burger joint. The quality at McDonald’s has been poor for quite some time, and the prices are astronomical. These inflated prices have created a false floor for the brand.
It’s clear that the CEO, if they indeed have a plan, recognizes that attempting to be “premium” when their core demographic is families is not a smart move. Personally, I refuse to pay $35-$40 for four meals from McDonald’s. That’s just not something I’m willing to do. McDonald’s needs to find a way back to the $5-$8 range and distance themselves from the current $10-$12 price point. There are numerous specialist food places that offer a significantly better product in the $8 range.
The poor quality and inflated prices are a recipe for disaster for McDonald’s. If they don’t address at least one of these issues, they risk their brand slowly fading away. Why would I waste my precious calorie intake for the week on McDonald’s when I can choose from options like Wendy’s, steak n shake, or Popeyes? Lately, they’ve even been having sales, and for the first time in a while, I can actually justify eating there. The discontinuation of the affordable hamburger and cheeseburger doesn’t exactly scream “affordability.” People may be paying these prices now, but if the brand becomes synonymous with unaffordable garbage, it’s sure to die out. Someone else will figure out how to make a cheap cheeseburger, and McDonald’s will be left behind.
We can’t forget Burger King’s role in this either. Charging $9.50 for a Whopper with cheese is outrageous. And McDonald’s charging $2.49 or $2.69 for a cheeseburger is equally as offensive. Two cheeseburgers and a large drink should still be less than $3. The inflation we are experiencing is just making everything unreasonably expensive. I remember when I was a kid, a McDouble was less than $2. Now, as a person in my late 20s, the same McDouble is almost $5. The affordability aspect of McDonald’s has completely disappeared. It used to be a guilty pleasure when my budget was tight, a way to treat myself to something cheap and somewhat unhealthy. Now, it’s just unhealthy *and* expensive.
As a resident of Chicago, I can’t help but notice the success of local sub shops, Greek-owned hot dog stands, burger joints, and gyro places. These places offer food of similar or lower prices than McDonald’s while providing mountains of quality food. If these family-owned businesses can charge decent prices and still make a living, I have faith that McDonald’s, with all its resources and global presence, can find a way to do the same. It’s a messed up system when a stock plummets because people can’t afford the terrible food it represents. McDonald’s and Taco Bell have both priced me out of their food market, and I can find decent food for the same price elsewhere.
One important point to note is that the drop in McDonald’s stock price is not solely due to the CEO’s promise of affordability. It dropped because global sales didn’t meet analyst targets. In fact, if the CEO hadn’t mentioned affordability, the drop might have been even more substantial. This highlights the obsession with infinite growth and profits that plagues many corporations. What’s wrong with just being a C-grade cheap burger joint that is easily accessible and affordable? McDonald’s was a generally beloved brand around the world, operating successfully for decades. Now, some new executives at the top seem to think that’s not enough and they want to buy themselves a few new superyachts. It’s frustrating and disappointing to witness.
In terms of personal health and well-being, I can’t deny that fast food has played a detrimental role. I used to find comfort in the affordability and convenience of fast food, but the quality and value proposition have dropped significantly over time. There are far better fast food places available at similar or slightly higher prices. It’s also worth mentioning the stark difference in quality between McDonald’s in Europe and the United States/Canada. Their fries are still the best in my opinion, but overall, the food is subpar compared to what I’ve experienced abroad.
McDonald’s has noted a drop in transactions with lower-income customers who make $45K a year or less. The CEO acknowledged that eating at home has become more affordable for this demographic, and the battleground lies with the low-income consumer. This realization shouldn’t be a surprise to anyone. It’s common sense that if people can’t afford your food, they won’t buy it. So why the negative reaction from shareholders? We need to break free from this incessant pursuit of profit at the expense of affordability and customer satisfaction.
In conclusion, I can’t help but be frustrated by the direction McDonald’s has taken. They’ve strayed away from affordability, prioritizing profit and “premium” offerings instead. The drop in stock price is not only a reflection of the CEO’s promise of affordability but also a result of global sales not meeting expectations. It’s time for McDonald’s to embrace their roots as a cheap burger joint that offers accessible and affordable food. I don’t know about you, but I miss the days of the real dollar menu and the simplicity it brought. Hopefully, McDonald’s and other fast food chains will realize that their value proposition lies in being affordable, not in fancy designer meals and inflated prices. Until then, I’ll continue to seek out alternatives that offer better quality and value for my hard-earned money.