At one point, McDonald’s was looking like one of the most recession-proof businesses in America.
These days, not so much. The fast-food behemoth recently reported its second consecutive monthly U.S. sales decline. That’s pretty significant, especially since the company has had only six losing months in the past six and half years. And last November, when the recession was hammering into overdrive, McDonald’s actually posted a sales gain of 4.5 percent in the U.S. So what’s gone wrong since then? A year ago, the burger chain benefited as consumers dumped high-end eateries for lower-cost alternatives. But as the unemployment situation spiraled from bad to worse, many of those same customers have gone from eating at McDonald’s to dumpster diving out back of McDonald’s.
Cheap eats. In the face of declining sales, McDonald’s is doing what it does best. It is cutting prices further, adding five new items to its dollar menu. After all, if you can’t make your food taste good, the least you can do is make it cheap. Not that everything is awful on the McDonald’s menu, but breakfast items have been notorious laggards, at least as far as the old taste buds are concerned. But now, at a buck a pop, even we’d be able to stomach the Sausage McMuffin, sausage burrito, sausage biscuit, and hash browns, all of which join the McGeorge Washington club. The new dollar breakfast menu is also putting pressure on McDonald's competitors, according to this report. Dunkin Donuts is testing a 99-cent breakfast menu, and Burger King's is pushing a $1 breakfast value menu that includes hash browns, a ham omelet sandwich and three french toast sticks. French toast sticks? That’s where we draw the line.
Farewell Frosty. Wendy’s is bidding adieu to Japan after 29 years in the country. The burger chain said all 71 franchises in the country will shut by the end of December. No reason was given for the departure, but it’s clear that Wendy’s could never compete with market-leading McDonald’s, which has 3,720 locations scattered throughout the island nation. Wendy’s is not the first Western fast-food chain to say sayonara to Japan. Burger King abandoned the market in 2001, but returned six years later and now has 16 restaurants in Japan. Wendy’s probably had trouble tailoring its menu to local tastes. When they’re not gorging at McDonald’s, the Japanese prefer homegrown fast-food chains like Mos Burger, which serves the Triple Prawn Burger and rice burgers with fried shrimp. Hard to wash those down with a Frosty. The company that ran Wendy’s in Japan says it will now focus its efforts on a chain of beef bowl restaurants.
