Joel Libava
I know why McDonald’s same store sales took a hit last quarter.
But, before I tell you, I figured that it would behoove me to give you the precise definition of same-store sales.
Same-store sales are a handy way to measure how well a business is doing at its existing locations. They’re shown as a percentage that reflects how much revenue has gone up or down.
For instance, if a chain reports a same-store sales increase of 7%, it means the total dollar revenue at its existing locations stores grew by 7% compared to the same time period last year.
With that in mind, McDonald’s same-store sales were down last quarter. A lot. from CNBC:
“McDonald’s U.S. same-store sales shrank 3.6% during the first quarter as the chain faced bad weather and a more cautious consumer. That drop is the worst in McDonald’s home market since the 8.7% plunge during the second quarter of 2020.”
Let’s discuss this.
Why McDonald’s Same-Store Sales Finally Took a Hit
Sales at McDonald’s restaurants nose-dived because an order of Large fries costs $4.00 (in suburban Cleveland). The national average is probably closer to $6.
Look, I’ve been bitching about the obscene prices McDonald’s has been charging for a couple of years now.
And while it’s true corporate got aggressive with Value Meals the past few months, it’s obviously not enough.
As to the price of a large order of McDonald’s fries, how much profit do you think is being made?
40%? 50%? More?
Probably more.
Profit is Not a Dirty Word
I’m all for franchisees making a profit. Corporate, too. But this feels like greed.
Because in a perfect world, it shouldn’t cost a family of four close to $40 to dine at McDonald’s. It’s ridiculous.
In my opinion, consumers are sick of paying these prices. I know I am. And that’s what has finally hurt same-store sales at McDonald’s franchise restaurants.
McDonalds Still Owns the Important Freeway Exit Real Estate
Up until a couple of weeks ago, I hadn’t given McDonald’s my money for food in almost 6 months. The reason?
I’m sick of feeling hosed* every time I went there for food.
*Ripped off.
As to why I decided to give McDonald’s a try again?
We recently drove to Florida for a needed vacation.
And practically every exit had a McDonald’s restaurant. That’s part of a brilliant strategy the late Ray Kroc started way back.
That said, the food was average, the service varied from place to place, but the prices?
They were the same everywhere.
Too damn high.
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