Shop Talk

Retailers, consumers and prices

Check Out Line: Trading the $1 burger for the $3 latte

January 22, 2010

mcdCheck out profits rising at McDonald’s, the world’s largest hamburger chain.

But while profits rose, the results showed the chain’s U.S. business continued to lag its international operations.  U.S. same-store sales rose 1 percent in December, after two months of declines. Globally, same-store sales rose 2.3 percent for the quarter and 2.7 percent in December.

At home, McDonald’s is facing competition from fast-food chains like Taco Bell and Burger King. While McDonald’s is well known for its Dollar Menu, which features the $1 sausage burrito and $1 McDouble burger, rivals are now using low prices — like Burger King’s offer of a 1/4-pound double cheeseburger for $1 — to lure diners.

At the same time, some consumers recently have returned to more upscale chains like Panera Bread and Starbucks — leading some analysts to say that fast-food chains are now in for a period of sinking sales and rampant discounting, the likes of which hobbled pricier restaurants for much of the recession.

Also in the basket:

Kimberly-Clark profit, outlook miss Street view

Hershey rules itself out of bidding for Cadbury

Coca-Cola eyes Russian juice maker Nidan: sources

Macy’s might turn to outlet stores (WWD, subscription required)

(Photo: Reuters)

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