Posted by OhioGuy on February 5, 2009, 3:32 pm
http://cosmos.bcst.yahoo.com/up/player/popup/?rn906861&cl 887463&chB26720&src=news
I found myself occasionally going to McDonald's after I discovered
their Double Cheeseburger on the dollar menu. Normally, I went to
Wendy's and got the Jr. Cheeseburger Deluxe, or sometimes to Burger King
to get the Whopper Jr.
However, our local McDonald's raised the price of their double
cheeseburger from $1 up to $1.38. The one still on the dollar menu has
two burger patties, and just a single slice of cheese. A 38% increase
to keep that second piece of cheese seemed a bit much, so I don't go to
McDonald's much at all any more.
Now that the price for food commodities has started going back down,
how many of you think that McDonald's will decrease their retail costs?
Will they, or will it be more like how the gas stations keep prices up
for a while?
Posted by Woody on February 5, 2009, 4:45 pm
>
http://cosmos.bcst.yahoo.com/up/player/popup/?rn906861&cl 887463&chB26720&src=news
> I found myself occasionally going to McDonald's after I discovered their
> Double Cheeseburger on the dollar menu. Normally, I went to Wendy's and
> got the Jr. Cheeseburger Deluxe, or sometimes to Burger King to get the
> Whopper Jr.
> However, our local McDonald's raised the price of their double
> cheeseburger from $1 up to $1.38. The one still on the dollar menu has
> two burger patties, and just a single slice of cheese. A 38% increase to
> keep that second piece of cheese seemed a bit much, so I don't go to
> McDonald's much at all any more.
> Now that the price for food commodities has started going back down, how
> many of you think that McDonald's will decrease their retail costs? Will
> they, or will it be more like how the gas stations keep prices up for a
> while?
Any business will keep their prices as high as possible, as long as
possible, in order to fatten their bottom line. Note what the U.S. banks are
doing with the "bailout" money--stuffing it in their mattress so they have a
better dividend report to issue to shareholders next quarter.
You can expect McDonald's to decrease their prices only if sales decline
enough to hurt their profitability. And, when they do so, they will make a
big lying deal of how "we're reducing prices to save you money!"
Woody
Posted by John A. Weeks III on February 5, 2009, 7:25 pm
> Any business will keep their prices as high as possible, as long as
> possible, in order to fatten their bottom line.
The facts show that is not true. Walmart has a policy of always
trying to offer the lowest possible price. They account for a
major slice of the retail market.
-john-
--
======================================================================
John A. Weeks III 612-720-2854 john@johnweeks.com
Newave Communications http://www.johnweeks.com
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Posted by Woody on February 5, 2009, 7:45 pm
>> Any business will keep their prices as high as possible, as long as
>> possible, in order to fatten their bottom line.
> The facts show that is not true. Walmart has a policy of always
> trying to offer the lowest possible price. They account for a
> major slice of the retail market.
The "lowest possible price" is zero! AFAIK Wal-Mart doesn't give stuff away
for free. Failing that, the lowest feasible price is at cost, and AFAIK
Wal-Mart does not avoid making a profit.
What Wal-Mart does is what every other retail operation does: Balance how
many pieces they're going to sell against how much to charge for each piece,
in order to maximize the total amount of money taken in. They make a big
noise about "rollbacks" but, in fact, the effect of rolled-back prices on
the operation are calculated long before the initial, not-rolled-back,
_false_ price is first posted. This is a marketing principle that has been
known and used for decades.
Any business that claims to give a shit about whether its customers save
money or not is lying. Don't believe the hype.
Woody
Posted by Lou on February 5, 2009, 8:08 pm
> The "lowest possible price" is zero!
Where do you get this stuff? With extremely rare exceptions, zero is not a
sustainable price. Any company that wants to stay in business cannot simply
give its product away, any more than you could go to work every day without
being paid.
> AFAIK Wal-Mart doesn't give stuff away
> for free. Failing that, the lowest feasible price is at cost, and AFAIK
> Wal-Mart does not avoid making a profit.
"Cost" of course, includes the costs of doing business - store
rent/construction, paying for the help, utilities, taxes, etc. And that's
still not a feasible price - how much of your money have you put into an
enterprise with the **intention** of not getting a return?
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