Digital channels tend to have higher earners by demographics, so it does seem McDonald's really wants a bigger slice of the higher income consumer.
More evidence McDonald's is abandoning the value consumer: Increasing digital marketing spend.
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Digital channels tend to have higher earners by demographics, so it does seem McDonald's really wants a bigger slice of the higher income consumer.
McDonald's is barking up the wrong tree. The higher income consumer has no interest in terrible fast food at high prices when they know you can better food for the same price elsewhere.
Why would higher income consumers want to eat at fucking McDonald's?
McDonald's succeeded when they were fast and cheap.
They're not Five Guys or Shake Shack.
McDonald's succeeded when they were fast and cheap.
They're not Five Guys or Shake Shack.
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I think there strategy is that, they will get less volume, as they turn off the value consumers.
However, up their margins with lower labor cost (less kitchen staff needed due to lower volume), and increase price per order by raising prices to offset the volume reductions.
We're even seeing this by them moving self serve soda fountains back to the kitchen. That's less staff needed to attend those machines. You can use kitchen staff.
Cashiers are basically dead with their kiosks too.
They would literally have to get rid of the McDonalds name. McDonalds is synonymous with cheap and shitty food. This CEO is a dumbass.
McDonalds has the best digital coupons by far which helps keep the prices low for me like Dominos. Anyone who just drives up and orders is getting scammed.
Maybe they are right and it will good for them, but as someone that enjoy eating some fast-food, I just can't find the value anymore. It was great when it was cheaper than "normal" meals, but now fast-foods are actually more expensive than eating in a restaurant, and the quality / size of the food is even worse.
And in certain countries, we don't really have that whole "Coupons" thing. If I want to eat a McDonalds, it will cost me 18 euros +. I can go to a burger joint for a good ass burger menu with great meat, bigger burger and fresh fries, and pay something like 14/15 euros.
And in certain countries, we don't really have that whole "Coupons" thing. If I want to eat a McDonalds, it will cost me 18 euros +. I can go to a burger joint for a good ass burger menu with great meat, bigger burger and fresh fries, and pay something like 14/15 euros.
If the bar for higher income consumers is owning a phone then I think they're going to be fine lol
This does hurt people in extreme poverty, but as a business decision it makes sense to me. Like posted above, what they're losing in consumers paying with nickels they're more than making up for on less staff.
This does hurt people in extreme poverty, but as a business decision it makes sense to me. Like posted above, what they're losing in consumers paying with nickels they're more than making up for on less staff.
The average higher-income consumer is going to have the same reaction looking at their increased price: "Why would I pay that much for fucking McDonald's?" They're going to have to completely makeover their image to overcome that.
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Not just owning a phone, downloading the app, adding a payment method to that app, etc. these are seen as higher income behaviors in the QSR space.
That's a lot of hoops. Heck, we have ppl here that won't download the app.
They're not targeting lower income consumer here. They are going up-market with these decisions.
So they great things about the app is that McDonald's now has way more accurate analytics data to mine, so according to their analysis, they believe so.
If it is successful, only time will tell.
But it does look like they're abandoning lower income consumers, for now.
Yep. they can change all these pieces to "appeal" to higher consumers but at the end of the day they're still just "Mcdonalds".
Would even argue that Menu wise they're doing less to appeal to higher consumers after they got rid of their Specialty Burger Menu they had for a time.
There's nothing on their current menu that looks worth paying a premium for.
They want to be seen as Chick-Fil-A Quality so bad but don't have the items to back that.
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MBAs are trained on Milton Friedman basically--maximize shareholder value.
Harvard Business School (HBS) the most influential, basically espouses this method.
Yeah even the McPlant which is probably higher quality than their meat offerings a few more quid and I can go to a 100% Vegan place and get quality food. One of those places you go when it's better value than a supermarket meal deal and you want some cheap junk. (Usually for me when I'm going to get the train somewhere in a place with nothing else decent near by).
No but their food is still fast, which was always the appeal for me. Sure there are better fast food options for quality, but most of them aren't as convenient as McDonalds which is everywhere.
Oh, I know, but whoever thinks raising prices and chasing higher income customers is going to do anything other than burn money is not very good at their job.
I guess they are going to be closing down several locations as I know a bunch of depressed rural areas with a McDonald's that don't have a lot of fast food eating high earners.
I mean yes, but also digital cost of acquisition is a lot less than other forms of marketing so it could mean better margins for reduced prices. It won't....but it could!
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No, it will be a mix. They're going up-market as a focus. It doesn't mean they're saying no to any consumer.
For example, a Walmart shopper can still shop at Macy's. a Macy's shopper can shop at Nordstrom's.
However, each of these three do have a customer that they focus on more than others. However, they'll take your money regardless.
McDonald's knows they're losing the value consumer. They've said as much in public statements. It's not hidden.
Less volume also means less staff at restaurants.
It is cheaper, but they're also making operator pay into the fund! LOL
Lol holy shit the Botox on those quarter pounder pattysYep. they can change all these pieces to "appeal" to higher consumers but at the end of the day they're still just "Mcdonalds".
Would even argue that Menu wise they're doing less to appeal to higher consumers after they got rid of their Specialty Burger Menu they had for a time.
There's nothing on their current menu that looks worth paying a premium for.
They want to be seen as Chick-Fil-A Quality so bad but don't have the items to back that.
I think the biggest problem McDonald's can't get away from is that they were created during a time when ground beef was super cheap. Since ~2011 or so when international food prices went bonkers and China's protein demands started becoming more pronounced as they've developed, ground beef just isn't that cheap anymore. They've tried to push chicken in various forms with varying degrees of success to compensate.
But at some point they're a burger business and you're forced to charge a certain price for it.
Chipotle has the same cost problems these days so that's probably not the model to chase anymore. Many locations are absolutely notorious for giving tiny portions for their online orders.
Although (and you already alluded to it), ironically a Chipotle entree is a better and more satiating meal for not much more money.
But at some point they're a burger business and you're forced to charge a certain price for it.
Chipotle has the same cost problems these days so that's probably not the model to chase anymore. Many locations are absolutely notorious for giving tiny portions for their online orders.
Although (and you already alluded to it), ironically a Chipotle entree is a better and more satiating meal for not much more money.
Even with minimally staffed restaurants and expected lower volumes, the whole plan is predicated on people willingly paying more for worse food. It's not a "we're going to go up-scale with a gourmet menu", it's "pay more for the same shit food". I'm sure the suits at corporate are running the numbers and think the math works out but I'm not convinced.
Though at the end of the day they're mostly a real estate company anyway so they have the leeway to try goofy shit like this without tanking the company.
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I heard that actually.
Internationally, that's the not case, right? Most of their real estate holdings are domestic, no?
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Yeah, McDonald's is great drunk food.
But it's never filling. I can eat a large number 1 (Mac meal) and still be hungry a few hours later.
I know nutritionally why--lower protein (those patties are tiny) and basically no fiber.
Unlike Chipotle, where you get decent protein (meat plus beans), fiber (beans, corns, guac) and fats (sour cream, cheese). You're pretty satisfied. More so if you double up on protein.
The issue is that these McDonald's locations I'm talking about aren't exactly generating mountains of money from their usual clientele and I'm not really sure there are anywhere near enough higher income earners desperate for McDonald's. There are folks that come up from NYC for the weekends in the fall to look at the leaves changing color. They're going to craft beer breweries and hip local places. Several other fast food places have already closed in the years since the pandemic to give some more context.
Where did it mention the high earner portion?
They seem to be all in on loyalty programs, and the app ordering but I guess I don't know why that correlates to high earners. The article just says:
"As a result, the new approach will likely lead McDonald's to cut back on legacy marketing tools, such as TV commercials, and focus on areas that tangibly lead to higher sales."
Their pricing is the issue at this moment, where they are coopeting with higher quality products at almost the same price point.
They seem to be all in on loyalty programs, and the app ordering but I guess I don't know why that correlates to high earners. The article just says:
"As a result, the new approach will likely lead McDonald's to cut back on legacy marketing tools, such as TV commercials, and focus on areas that tangibly lead to higher sales."
Their pricing is the issue at this moment, where they are coopeting with higher quality products at almost the same price point.
In my region McDonalds is now in striking distance price-wise of Five Guys. Nobody who can afford to regularly spend an extra 15% on a fast food meal is going to McD over Five Guys.
It makes sense. These companies can't ever admit there's a built-in limit to raising prices just because they feel like it. They will continue to flail around to justify endless artificial inflation.
It makes sense. These companies can't ever admit there's a built-in limit to raising prices just because they feel like it. They will continue to flail around to justify endless artificial inflation.
For now. Those only exist to get people on to the app. Once enough people are there, they'll be gone or won't be as generous. 20 years ago I never ordered off amazon without using a coupon code, cause they were so easy to find. Now I can only use them when they're trying to push some dumb new initiative they have like photo backup or kiosk pickup.
Yes me and my wife have recently had the same conclusion in the UK regarding Five Guys > McDonalds.
It's already slowly happening. The McDonald's app had way crazier deals when it first launched. Those deals are still good but they have slowly made it where you have to spend a little bit more money.
If i want a high end experience i wouldn't be going to McDonald's in the first place. Bizarre strategy
the BOGO 6pc nuggets stops being as good of a code when the 6pc nuggets is $5.50 lol
I'm sure it's different elsewhere, but in the city where I live the only McDonalds are near college campuses and a couple of very low income areas. They are all literally walking distance to better food at the same or even lower prices. The one I pass regularly used to be really busy 4-5 years ago and now hardly anyone is there. Maybe the dip happened when classes went remote for COVID and when students return they didn't become customers again due in part to prices.
I live in an area filled with high income families, and they've been starting to abandon McDonald's for Chipotle, Culver's, Freddy's, local eateries, and patiently waiting for our In n Out to be finished. Something is going to have to start bringing customers back in areas like mine across the country, and everything but lowering prices is going to bite them hard.
They've been doing coupons for decades, they just moved the coupons from print in the newspaper to digital on the app. While I'm sure enshitification will eventually hit all the fast food apps, I'm not super worried about it anytime soon.
I don't understand how this move is a knock on value options. I prioritize value when ordering, and that's why I use the app and mobile order. Where I am, I have access to a BOGO big mac/quarter p. Or a free medium fries after spending $1. Or 20% >$10 order. or an out-right free big Mac if I use the rewards points.
A lot of rich people clearly contradict the argument in this thread that rich people don't eat mcd. Warren Buffett's worth 140 billion, still goes to mcdonald's every day for a $3 breakfast. You can be rich and still prioritize being a value consumer. A lot of rich people will say that's how they got rich. It's not black and white.
A lot of rich people clearly contradict the argument in this thread that rich people don't eat mcd. Warren Buffett's worth 140 billion, still goes to mcdonald's every day for a $3 breakfast. You can be rich and still prioritize being a value consumer. A lot of rich people will say that's how they got rich. It's not black and white.
Completely ignoring the fact that ten dollars for a Big Mac meal is definitely on the upper end...Yep. they can change all these pieces to "appeal" to higher consumers but at the end of the day they're still just "Mcdonalds".
Would even argue that Menu wise they're doing less to appeal to higher consumers after they got rid of their Specialty Burger Menu they had for a time.
There's nothing on their current menu that looks worth paying a premium for.
They want to be seen as Chick-Fil-A Quality so bad but don't have the items to back that.
Does that actually say "9.69" for the 2 Cheeseburgers combo meal?
Are they high?
