Fast Food Price Wars Coming? The McRib, What's In It?

McDonald’s Corp said on Monday it would introduce new menus with $1, $2 and $3 items in early January.

McDonald’s dropped its popular “Dollar Menu” in 2013 after franchisees groused that selling items like a double cheeseburger for $1 cut into profits. The replacement “Dollar Menu & More” had higher prices, but failed to draw more customers despite heavy marketing.

The new dollar menus, set to debut on Jan. 4, include any size soft drinks and cheeseburgers for $1, small McCafe drinks and bacon McDoubles for $2 and Happy Meals and triple cheeseburgers for $3, McDonald’s said.

Elsewhere, Taco Bell regularly rotates the roughly 20 items on its $1 value menu. Subway, which made a huge splash a few years ago with its “$5 foot-long” special, is now offering a variety of six-inch sandwiches for $2.99 each.

Dunkin’ Donuts also is brewing up more value offers after franchisees warmed to the idea of using deals in their fight to win breakfast.

The strategy is not without risks, said Goldin, who noted that rising food and labor costs could squeeze franchisees who bear the brunt of such cost increases.

“They are really stuck in a value trap,” Goldin said. “There is going to be tremendous pressure to raise prices.”

Where's the Value?

"All of the value menus are designed to protect franchisee margins", the McDonald’s said.

If the "value" meals preserve profits, where is the value?

Any size soft drink for $1 is no value. The markups are enormous, as are the calories unless someone orders a diet drink.

Consider the McRib? Do you know what's in it? Here's a hint: "‘Restructured Meat’ from Pig Heart, Tongue, Stomach."

Click on the link for more details. Yum, indeed.

Enter the Fed

Meanwhile, rest assured the Fed does not want the consumer to get any value either.

The Fed will not be happy with non-value, value menus, whether there is any value or not (and there isn't).

Mike "Mish" Shedlock

Comments
No. 1-14
Stuki
Stuki

@RobinBanks:
That is one of the great boons to fast food shops in the US as well. Either tip staff a buck for using the facilities, or buy something from them whenever you do.

@Snow_Dog:
In due time, discussion sites/boards, along with most else that is interesting on the internet, will move to platforms optimized to work with onion routing a-la Tor. So that those posting, can have a reasonable expectation of anonymity. Absent that, the ever-increasing share of the population who are censored, or are being monitored under either overt or implicit threat of reprisals, will be effectively closed out of debates. Rendering debates less interesting in the process. Doubly so as, in totalitarian societies, those banned are virtually always those with the most of importance to contribute.

Providing interesting content platforms, as opposed to their uninteresting pap variety, is cheap. Interesting pretty much definitionally means participants’ inputs are thought out. Hence a platform for interesting does not need to be entirely real time/synchronous. But is instead tolerant of a fair amount of latency. And lowering latency is what drives up costs in a packet switched environment like the internet.

Onion routing are doubly hard for real-time, synchronous, protocols. Which is what “web 2.0” has largely been about. But the latency added to make onion routing cheap and easy, is still way below that required for human participants’ inputs to shift; from mindless, reflexive burps a-la televised debates, radio shows, rapid fire text messages and Twitter; to something potentially more thoughtful. So, the quality of debate and communication in high latency fora like email, traditional discussion boards, mailing lists and debates in printed media, will tend to be much higher than in the aforementioned low latency variety.

Over time, thoughtful beats mindless. Hence fora optimizing for thoughtfulness rather than mindlessness, will eventually rise in relative importance.

Mary Pat Campbell
Mary Pat Campbell
Mary Pat Campbell
Mary Pat Campbell

In other news, check out this Hormel promo from the 1960s:

Mary Pat Campbell
Mary Pat Campbell

I don't see the issue with ... I guess they're called "variety meats" now.

I love lasagna made with ground beef heart (I know that's what it is because my husband grinds the heart) -- beefiest-tasting lasagna I've ever had. Also, anybody who eats hot dogs knows they're not getting the "good" stuff. Or, rather, the "pretty" stuff. I like sausage!

Yorik
Yorik

Meanwhile Steak and Shake has started offering a Premium Angus burger. You don’t make profits off the “value” menu; you make profits off the premium menu.

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