Economics

It's Now Officially a Recession or, The Hamburglar Has Finally Won

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My arteries cheer this news even as my wallet weeps:

While consumers have seen the prices of milk and meat products rise in the supermarket aisles for months, fast-food chains have stood against wider trends. But McDonald's today said that higher wholesale prices are forcing the fast-food chain to change its menu, meaning customers may soon get less for a buck….

For McDonald's, the biggest change surrounds the star of its dollar menu, the double cheeseburger. Some franchises are now selling it with one slice of cheese instead of two. Others are raising the price by as much as 19 cents, taking it off the dollar menu altogether.

"The life of the double cheeseburger remains to be seen," Jeffery Bernstein, Lehman Brothers analyst, said. "They'll still sell it, but you might not be seeing it for a dollar for much longer."

The dollar menu accounts for 14 percent of McD's receipts and has been widely hailed as a success in generating foot traffic that ultimately leads to higher sales overall (one reason why the double cheeseburger is routinely sold for less than its single counterpart). But it now appears that instead of washing down a dollar item with more expensive fare, customers are sticking to the cheap stuff.

More here.

Hat tip: Michael C. Moynihan.

NEXT: Collateral Damage

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  1. All markets are dynamic, but considering that Subway and Blimpie still try to charge $5 or more for a sandwich (that takes longer to make), I’m not sure McD & BK have much to worry about if they downgrade to a cheeseburger for a buck rather than a double cheeseburger.

  2. It’s about time. Maybe now those black people will stop eating so much McDonalds.

  3. I was just thinking of how awesome it would be to go as Mayor McCheese for Halloween, but then I realized that it would probably take out a lot of people in my path and might not be welcome at cocktail parties.

  4. When they first introduced the dollar menu a few years ago, the Quarter Pounder with Cheese was on it. This was an attempt to be a loss leader as well, but it certainly proved to be a mistake. McDonalds had its first ever quarterly loss thanks to people just ordering Quarter Pounders off the dollar menu. (In some areas other premium items like the Big N’ Tasty were on the dollar menu.)

  5. Moose, wouldn’t you be more appropriate as Grimace?

  6. Epi –
    I can’t believe you’re making fun of my being pear shaped!

    But seriously, why more appropriate as Grimace?

  7. I love the dollar menu. Two double cheeseburgers and two apple pies for $3.24? Freakin’ awesome!

    $1 double cheeseburgers will be missed.

  8. I can’t believe you’re making fun of my being pear shaped!

    That was pretty much the joke, you got it on the first try. Plus, any excuse to reference Grimace (or Uncle O’Grimacey!) is too good to pass up. Fatty.

  9. Fatty.

    You kill me. Kinda like the Hammurderer

    Stabble Stabble!

  10. It’s Now Officially a Recession

    This isn’t a sign of a recession; it’s a sign of inflation: too many dollars chasing too few goods.

    We’re seeing it in raw materials (read: commodities) first, which is resulting in cost-push price increases in things like McDonald’s hamburgers. Eventually, we’ll see it in everything else, but it will take years for demand-pull price increases to affect consumer products due to the ongoing recession depressing consumer spending.

    The bottom line is that major price increases are coming across-the-board: we’re only in the very beginning of the first wave.

  11. You kill me. Kinda like the Hammurderer

    At least you didn’t call me the Turdburglar.

  12. doom
    Dooom
    DOOOOM

  13. Price increases mean discrimination against those who can least afford it: our nation’s negroes. Growing new hamburgers will take years and will do nothing to lower the price of hamburgers now. I offer a plan for hope, a plan for change. I am calling for the Beef Department to tap into the Strategic Hamburger Reserve, so ordinary Americans can once again afford this basic human right.

  14. A Democrat,
    But surely you will also create a new regulatory agency to put a stop to greedy parasitic beef speculation. Increase the hamburgers per pound mandates on manufactures. AND vastly increase the funding to develop meat alternatives.

  15. Warren,

    That goes without saying.

  16. That goes without saying.

    Since the damn beef speculators haven’t been ponying up the campaign contributions and no-show jobs for my relatives, anyway.

  17. Growing new hamburgers will take years and will do nothing to lower the price of hamburgers now.

    I don’t know why this made me laugh out loud, but it did. I hope the next big public works project is a Pee-Wee Hermanesque hotdog farm.

  18. If they still have a chicken samich and small fry for $1 each, I’ll continue to be an honorary oppressed minority.

  19. considering that Subway and Blimpie still try to charge $5 or more for a sandwich (that takes longer to make), I’m not sure McD & BK have much to worry about if they downgrade to a cheeseburger for a buck rather than a double cheeseburger.

    The difference is that Subway sandwiches are bigger, healthier, less greasy, less squashed, and don’t taste like pepper-covered shit.

    Also, I’d happily wait longer if it means I can watch my sandwich being made, making sure that the ingredients don’t include spit, oven cleaner, or menstrual fluid.

  20. There will be new cabinet positions in my administration, including Minister of Mammalian Meat Products. Send resumes now. Get on board the Change Express! It’s for The Children?.

  21. I buy 2 of whatever is on Carl’s dollar menu, usually the spicy chicken sandwich, without any mayo etc. I take the insides from one sandwich and put them in the other. I throw away the extra buns. I wind up full, I’m not fat, the store manager hates me, all for 2 bucks. hahahahha

  22. Screw you all. Here in the Great White North(Alaska), there is no “dollar menu”. To be precise it’s the “$1.50 Menu”.

    The flipside, we get the McKinley Mac.

  23. Kwix!!!!!!!1

  24. The difference is that Subway sandwiches are bigger, healthier, less greasy, less squashed, and don’t taste slightly less like pepper-covered shit.

    fixed

  25. Look at this sorry, miserable squashed thing.

  26. Heh, that’s exactly the scene I thought of when I was posting, too…

  27. Waaaa! You people are PIGS!

    I promise to personally spit in every fifth burger!

  28. Eat me

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