Shop Talk

Retailers, consumers and prices

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

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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.

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