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Analysis: Beef price spike makes $1 McDouble harder to stomach

The world's largest restaurant chain launch $1 a competitive grilled Onions cheddar Hamburg in December. It also made new sandwich - a hamburger, not 2 McDouble - current TV advertising star, state shares McDouble.
McDonald's corporation (MCD. N) restaurant operators are faced with difficulties, $McDouble menu has the highest raw material costs, it is a bad financial proposition, unless the customer increase both sides of the high profits, such as French fries or soda water.
"If McDouble is all customers to buy, you lose money," said Richard Adams, now suggested chain restaurant operators before joining trader. "What's the price of beef, McDonald's management should be open McDouble dollars menu".
The decision will be a significant. McDonald's have to 10% to 15% of the sales from dollar menu and experts say, McDouble is one of the most popular items.
Many of the joining trader, the overall sales on the basis of the parent company to pay royalties, has the exercise of stock right to moving McDouble "menu to improve its price more than $100.
Reuters inspection found in several us cities of McDonald's restaurants sell a franchisor McDouble San Francisco $1.09, $1.19 Los Angeles, in Alaska's Kodiak island, 1.80 yuan and 1.89 yuan New York city.
Reuters visit Chicago and Boston, but for $1.29, $1.49, respectively, the requirements of the restaurant menu McDouble even did not provide. It is still in the dollar menu of cities, such as phoenix, Fresno, California Denver, Seattle, Washington, d.c., and st. Louis.
Spokesman danya proud of say: "McDonald's" committed to dollars menu and McDouble, and by the franchisor's support, in a statement. "Want to criticize the country's future will change is not accurate, speculative."
Produced by the fall
Dollars menu food and marketing change is McDonald's part of the program, stop continuous two years of gross profit margin decline, in its us $14000 restaurants. They come for the new McDonald's chief executive don Thompson mill company focused on its famous dollar menu to lure cash, creak creak patrons and resist closed recovery competitors, such as YUM! Brand company (YUM. N) taco bell chain and Hamburg WangQuanQiu company (BKW. N).
They also suggest that the United States restaurant strategy, can use contain higher beef cost caused by damage. McDonald's food costs skyrocket shook the dollar menu team of the history.
In December of 2008, the company puts forward the flagship double cheeseburgers price from $1 to $1.19 to $McDouble menu slot, which is basically a double cheeseburger minus 1 piece of cheese.
In the United States and 7.6% in 2007 and 7.7% of the food wholesale prices in 2008.



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