Margins, profitability and “value” in the fast food industry are issues that are becoming increasingly prominent.
A Wall Street Journal article of May 8, titled “McDonald’s, Wendy’s Battle for Value-Centric Customers” contains additional information concerning various issues including those concerning price affordability and price competitiveness.
Notable excerpts include:
McDonald’s Corp. and Wendy’s Co. are struggling to attract cost-conscious consumers who are demanding better deals than even these low-price fast-food chains offer.
Fast-food chains like McDonald’s and Wendy’s may seem like they would be resilient in this tough economy, but consumers have come to expect $1 burgers, and more brands have jumped on the bandwagon, with chains like Yum Brands Inc.’s Taco Bell and Arby’s Restaurant Group testing out new value menus.
McDonald’s last month reported weak earnings growth for the first quarter, saying it is sacrificing profit margins by focusing on value menus to avoid losing customers.
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