Sunday, October 18, 2015

McDonald's Going Bankrupt?? The Latest from ClickBait(tm) News!


The world's second-largest fast-food chain is hardly headed for bankruptcy.


In a recent click-bait headline, "Business Insider" touts that McDonald's is "in deep depression" and "headed for its final days"!!!

Is this true?  Well, of course not.   One formula for a good click-bait title is to include the name of a major American corporation, such as McDonald's, Wal-Mart, or General Motors.  Preferably, some large company that people irrationally hate (and yet still patronize).

Wal-Mart haters, for example, are legion.   They dislike the chain for just being big, basically.  They argue it puts "Mom and Pop" stores (read: the corner bodega that charges outrageous prices) out of business, or that they pay substandard wages.   Of course, a lot of this hate is fueled by the unions, who want to get into Wal-Mart, and if they ever do, you will see a sharp drop-off in the hate literature.

Few people actually admire success.  If you are successful, you will be attacked from all fronts.  McDonald's is successful because they sell the salty, fatty, starchy foods that people all over the world crave, even though these foods are bad for you.   We decry McDonald's for selling us crack - and then demand more crack.

Is McDonald's in trouble?   Well, perhaps in the short run.  It seems they are changing the menu there as often as most people change underwear.  They are trying to offer laborious and time-consuming options like customized burgers and all-day breakfast.   What they are missing out on is the primary mission of fast-food:  inexpensive food served very quickly.

When we are on the road, one reason we don't go to McDonald's is what we call the "dis-feng-shui" McDonald's.  These are the kinds of stores that just can't seem to get anything right.  You order a coffee and it takes ten minutes for them to pour it.  The deep-fryer is a study in passive-aggressiveness, as each employee tries to avoid the messy task of actually making the french fries and thus the bags of half-completed order start to pile up.   For whatever reason, these stores (and they are usually a particular linear layout) can't seem to work properly.   And as a result, you end up waiting, ten minutes or more, for food that used to be served in one.   And when you get the bill, well, $12 for two badly made burgers (mashed into a pulp, not like the photo on the menu) and undercooked fries, really doesn't seem like much of a "bargain" to anyone.

(As bad as McDonald's is, however, Dairy Queen is even worse.   Despite its name, the "ice cream" they serve doesn't appear to be even real.  Expect to wait a long, long time for even the most basic of food items from there).

The idea of a simple restaurant that just made burgers, fries, and shakes - as established by Ray Kroc back in the 1950's, has gone by the wayside.  Instead, we have complicated and difficult to navigate menus and menu items that no one ever orders, as they know they will take way too long to make and will be really disappointing and overpriced.

But perhaps there is a strategy to this model.  During the 2009 recession, McDonald's offered a "dollar menu" and business soared.  People felt they had less money to spend, so they spent it at McDonald's.  Other chains, such as Burger King and Arby's, were falling behind.

With the recession over, people are perhaps feeling they have more money to spend, and the dollar menu is not such a big deal anymore (indeed, it has disappeared from most McDonald's).   So maybe the idea of selling more upscale sandwiches with "premium ingredients" (make me laugh!) is an attempt to go after this more upscale market.

Maybe that will work.  Maybe not.   But the bottom line is, of course, that despite their tinkering around with the menu, the chain is hardly ready to completely shutter its doors anytime soon.

McDonald's, while large, is hardly the largest fast-food chain in the world.  That title goes to Subway, which is a franchise-based model, run by a privately held company, Doctor's Associates, Inc.

Funny, but no one ever protests how awful the pay rates are at Subway, or how bad the food is for you (which it can be, depending on what you order).  Even after their star spokesperson was arrested for child pornography charges, no one seems to care much.

Imagine if the actor playing Ronald McDonald was found with a stash of kiddie-porn?   The outrage would echo across the planet.

Funny how some folks hate some of "those big corporations" but don't hate others.....

3 comments:

  1. "McDonald's stock hits record high as turnaround takes hold"

    http://www.reuters.com/article/2015/10/23/us-mcdonalds-results-idUSKCN0SG1FZ20151023

    I'll bet the chumps who sold their stock based on the earlier story are going D'oh!

    ReplyDelete
  2. I went to McDonald's the other day with some friends, who wanted to get breakfast on a road trip. The $1 Egg McMuffin is now an astounding $2.99 (that's THREE BUCKS or a 200% price increase!). But the "meal" was $4.50, which made the package seem like a better buy.

    For some reason the hash browns are thicker than I remember them, but again, undercooked. No one makes them BROWN and crispy anymore!

    $22 (with tax) for four people for breakfast. Not a real bargain!

    ReplyDelete
  3. After the gloom-and-doom stories about McDonald's "heading for its final days" came out, the next month, the company reports improved profits and the stock price goes to an ALL-TIME HIGH.

    Say, you don't suppose someone planted those stories to depress the stock price so that they could buy it cheap and then clean up later on?

    Naw!

    Moral: Never trust the financial press!

    ReplyDelete

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