McDonald's strategically dropped the price of their sausage biscuit. This and other low prices is helping McDonald's to bring in business when other chains are losing customers due to cost.
The restaurant industry, and the quick service restaurant sub-segment in particular, is extremely competitive. McDonald's has very little power to increase the prices of its products given that many other competitors already offer attractive value menus.
McDonald's is a high profile target within the fast food industry and similar lawsuits to the one filed in 2003 (claiming that McDonald's was responsible for childhood obesity and which has not been fully resolved) could further damage the company's image.
Beef continues to generate the majority of McDonald's revenues, and if another mad cow scare were to arise, the company's sales would be significantly affect
Domestic sales growth at the 500 largest U.S. restaurant chains fell to 3.4 percent in 2008, a decrease from 5 percent the previous year, Technomic Inc, a foodservice consultant, said on Monday.
MCD management yesterday said they would change the Dollar Menu. One of the reason for change is commodity prices. Management also changed their guidance for Beef and Chicken prices in US and Europe and the later guidance is obviously higher than the first one.
It should be able to manage better than its competitors.
