Jun 12, 2008 -- McDonald's franchisees revolt against dollar menu
Clark is a devout fast-food consumer. Years ago, he even earned the nickname "The Carryout Kid" from his brother. Today, the penny-pinching guru favors the value menus at the major chains. But right now McDonald's has a civil war on its hands with franchisees upset about the dollar menu.
The franchisees are trying to pressure corporate to change the name of the dollar menu to the "McValue Menu," similar to what Wendy's did. With costs increasing, franchisees are not able to make a profit when they sell an item for a dollar. So The Wall Street Journal reports that some have already raised the prices on select dollar items. For example, they're charging $1.09 or $1.29 for a double cheeseburger.
Clark saw someone order 2 double cheeseburgers (at $1 each) and a complimentary cup of water at McDonald's -- a sure sign of inflation. Franchisees lose money every time that happens.
The dollar as a magic price point is under assault. What will the dollar stores do? Chinese goods cost more because of international inflation. They could raise prices, but the "two-dollar store" doesn't have the same ring to it!
Meanwhile, beware of hidden price increases at the dollar stores. Clark was recently shopping for shaving cream and noticed they shrunk the size but charged the same price.