McDonald’s Raising Prices, yet Gaining Customers in Tough Economy, How?

McDonald's, the largest fast food restaurant in the world, received some good news with its recent third-quarter earnings. It rose to 9 percent, or a profit of $1.51 billion. This exceeded analyst expectations making their stock soar higher. Many consumers may not realize McDonald's has been raising prices for several months. However, prices are expected to increase in the near future. Even though McDonald's customers may not be aware of the price increases it has been happening all along. This was done with strategic pricing, willful promotions and its monolithic corporate backing. In other words, the initial price increases were carefully crafted so the consumer didn't know what hit them.

The irony is McDonald's still have customers who keep coming back for more and more in this very tough economy, no matter what. CEO Jim Skinner says the reason for the increase in customers is listening to concerns for healthier meal options such as offering smoothies and oatmeal. Also, some of the locations are becoming more hip with remodeled restaurants and 24/7 service. Yet, in May at a stockholders meeting the company rejected a proposal requiring it to issue a report on childhood obesity, which has become an epidemic. Over 550 healthcare professionals signed an open letter to McDonald's pleading to "stop making the next generation sick." Obesity in children needs to be addressed, while McDonald's has a responsibility to the public. How convenient it says customers make their own dietary choices.

Have people truly forgotten how unhealthy fast foods are? Even though McDonald's has added salads and oatmeal it still contains too much sugar, fat and salt. The oatmeal alone has more sugar than a Snickers bar according to critics. I've tried the smoothies and they are full of sugar. The remodeling of restaurants and staying open 24 hours only increases costs. Of course it is passed on to, you guessed it, us customers. No wonder prices are increasing on a continuous basis with such high overheads. The supposed healthy meals at McDonald's are not at all healthy, people are not getting thinner eating fast foods and McDonald's continues to earn heftier profits. Maybe one day customers will finally "get it" when prices get too out of hand.

SOURCES:

Christina Rexrode, "McDonald's keeps gaining, talks price hikes", Yahoo! News.com

Eleazar David Meléndez, "McDonald's Price Hikes, Likely to Continue, Go Unnoticed by Patrons", International Business Times.com

Debra Sherman, "McDonald's stockholders reject obesity proposal", Reuters.com