Fast Food Price Wars Coming? The McRib, What's In It?

McDonald’s Corp said on Monday it would introduce new menus with $1, $2 and $3 items in early January.

McDonald’s dropped its popular “Dollar Menu” in 2013 after franchisees groused that selling items like a double cheeseburger for $1 cut into profits. The replacement “Dollar Menu & More” had higher prices, but failed to draw more customers despite heavy marketing.

The new dollar menus, set to debut on Jan. 4, include any size soft drinks and cheeseburgers for $1, small McCafe drinks and bacon McDoubles for $2 and Happy Meals and triple cheeseburgers for $3, McDonald’s said.

Elsewhere, Taco Bell regularly rotates the roughly 20 items on its $1 value menu. Subway, which made a huge splash a few years ago with its “$5 foot-long” special, is now offering a variety of six-inch sandwiches for $2.99 each.

Dunkin’ Donuts also is brewing up more value offers after franchisees warmed to the idea of using deals in their fight to win breakfast.

The strategy is not without risks, said Goldin, who noted that rising food and labor costs could squeeze franchisees who bear the brunt of such cost increases.

“They are really stuck in a value trap,” Goldin said. “There is going to be tremendous pressure to raise prices.”

Where's the Value?

"All of the value menus are designed to protect franchisee margins", the McDonald’s said.

If the "value" meals preserve profits, where is the value?

Any size soft drink for $1 is no value. The markups are enormous, as are the calories unless someone orders a diet drink.

Consider the McRib? Do you know what's in it? Here's a hint: "‘Restructured Meat’ from Pig Heart, Tongue, Stomach."

Click on the link for more details. Yum, indeed.

Enter the Fed

Meanwhile, rest assured the Fed does not want the consumer to get any value either.

The Fed will not be happy with non-value, value menus, whether there is any value or not (and there isn't).

Mike "Mish" Shedlock

I wonder if the restructured meat sandwich counts the same as real food in CPI calculations. I know quality food has gone up in price. So glad groceries can be purchased with credit cards otherwise I'd need to bring a substantial wad of cash to the supermarket just to keep the teenagers supplied with food.

@AlexSpencer:
I don’t much follow McDonalds food, but I’ve kept tabs on Salmon over the years. 40 years ago, what was sold as Salmon was generally caught on a troll in the pacific. And was pricey, as going after them in the northern Pacific was hard work in a 40 foot boat. But not silly pricey. Now, almost all of what is sold as Salmon, is grown in a wat in some antibiotic drenched tub in a lifeless, polluted fjord in Chile or elsewhere. And it’s marginally cheaper. Of course, the Fed insist the two are the same thing.

Thing is, you can still buy troll caught salmon. It’s not as if comparing like to like is any kind of difficult. But now, the “real deal” is genuinely silly priced. About $20 for a little 4 oz to 6 oz can. Same stuff as 40 years ago. Not any more “luxurious”, or “specialty.” Exact same stuff. Easy as heck to compare, entirely like for like. But by doing so, the Fed’s pretense that salmon is somehow “more affordable” now, hence contributes negatively to their childishly inane insistence of what “inflation” is, is dealt a blow. So, they instead prefer comparing prices of nice, wild, troll caught salmon anno 1970, to some bio experiment anno now, insisting the two are the same thing. And the indoctrinati laps it up whole, just as they do with whatever other nonsense some random expendable government hack spout about.

In the UK, McDonalds provide an excellent public service in that they provide half decent free public toilets unlike local councils.I've never heard anyone with continence issues or irritable bowel syndrome slag them off. Wouldn't touch the food with a barge pole. Why would you when Wetherspoons do a decent steak, trimmings and a pint of Guinness for £8.50 in Central London.

Stuki, how about this for a like-to-like comparison : the MishTalk blog site before and after the arrival of The Maven hosting platform.

The former “wild caught” version of MishTalk featured a tasty comments section with spicy debate between well informed participants. Since the migration to the “farmed” version, a more antiseptic, controlled biosphere has become the norm. Some of the regular comment contributors have been harvested to market, lest they occupy too much space in the holding pens or disrupt product quality which must be maintained uniformly, unlike it is in the wild.
Of course, it’s much more of a delicacy and packaged with upscale advertisements. Soon you’ll have to shop in a specialty store just to find any quality discussion of events at all. Time was you could stick your fishing pole into the stream and catch dinner and it was delicious. I once could catch quality, informed debate with my cellphone...

Meanwhile Steak and Shake has started offering a Premium Angus burger. You don’t make profits off the “value” menu; you make profits off the premium menu.

I don't see the issue with ... I guess they're called "variety meats" now.

I love lasagna made with ground beef heart (I know that's what it is because my husband grinds the heart) -- beefiest-tasting lasagna I've ever had. Also, anybody who eats hot dogs knows they're not getting the "good" stuff. Or, rather, the "pretty" stuff. I like sausage!

In other news, check out this Hormel promo from the 1960s:

@RobinBanks:
That is one of the great boons to fast food shops in the US as well. Either tip staff a buck for using the facilities, or buy something from them whenever you do.

@Snow_Dog:
In due time, discussion sites/boards, along with most else that is interesting on the internet, will move to platforms optimized to work with onion routing a-la Tor. So that those posting, can have a reasonable expectation of anonymity. Absent that, the ever-increasing share of the population who are censored, or are being monitored under either overt or implicit threat of reprisals, will be effectively closed out of debates. Rendering debates less interesting in the process. Doubly so as, in totalitarian societies, those banned are virtually always those with the most of importance to contribute.

Providing interesting content platforms, as opposed to their uninteresting pap variety, is cheap. Interesting pretty much definitionally means participants’ inputs are thought out. Hence a platform for interesting does not need to be entirely real time/synchronous. But is instead tolerant of a fair amount of latency. And lowering latency is what drives up costs in a packet switched environment like the internet.

Onion routing are doubly hard for real-time, synchronous, protocols. Which is what “web 2.0” has largely been about. But the latency added to make onion routing cheap and easy, is still way below that required for human participants’ inputs to shift; from mindless, reflexive burps a-la televised debates, radio shows, rapid fire text messages and Twitter; to something potentially more thoughtful. So, the quality of debate and communication in high latency fora like email, traditional discussion boards, mailing lists and debates in printed media, will tend to be much higher than in the aforementioned low latency variety.

Over time, thoughtful beats mindless. Hence fora optimizing for thoughtfulness rather than mindlessness, will eventually rise in relative importance.

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