Check out the strong sales at McDonald’s in the … United States?
 
The world’s biggest restaurant chain posted its largest monthly U.S. same-store sales gain since February, when Leap year added an extra selling day. Barring the Leap year, July was the best month in 11 months.
 
It seems like only a few months ago people were worried that cash-strapped U.S. consumers would start shunning restaurants altogether, even the less expensive ones like McDonald’s.
 
In fact, it was. The company posted a drop in U.S. same-store sales in March, the first such decline in five years.
 
But the U.S. rebounded and strength in U.S. sales in July is a sign that the company is benefiting as consumers trade down from casual-dining restaurants like Red Lobster and Applebee’s, and that the value message of McDonald’s is attracting customers, analysts said.
  
Growth in high-margin items like drinks could also help the company offset rising hamburger commodity prices, UBS restaurant analyst David Palmer said in a research note.
 
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(Photo: Reuters)

Check out the demise of the dollar menu as we know it?
 
McDonald’s, dealing with rising commodity costs in the U.S., said it is looking at changes to its popular Dollar Menu, which accounts for about 14 percent of U.S. sales.
 
“What fits on that menu will look different than now because it has to be profitable,” said McDonald’s Chief Operating Officer Ralph Alvarez on a conference call with analysts.
 
“We’ve got to make sure we’re pricing smart, not just pricing low. We’ll make the move at some point,” Alvarez said.
 
The comments from Alvarez come two months after Chief Executive Jim Skinnner said the company was willing to absorb some rising costs in order to ensure customer loyalty.
 
“This is not the time to be passing that on to consumers. They have long memories,” Skinner said.
 
One analyst said the popular double-cheeseburger could disappear from the Dollar Menu.
 
But pegging an offering, or even a business, to the dollar can prove to be a dicey proposal. The dollar has weakened and costs have gone up. Most “dollar” stores, for example, stopped capping prices at one dollar years ago.
 
But analysts do not see McDonald’s straying too far from the dollar.
 
“We do not expect McDonald’s to abandon the dollar price point, but rather evolve the menu with either new products at a near-dollar price point or adjust the pricing of select products that have seen significant cost pressures,” Goldman Sachs analyst Steven Kron said in a research note.
 
Perhaps calling it the “Mighty close (to a) Dollar Menu” would solve the problem. To long? Well, that could always be shortened to “McDollar Menu.”
 
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And the plot thinned… (N.Y. Times)

(Photo: Reuters)

Check out McDonald’s Corp’s long-awaited switch to trans fat-free cooking oil in the United States and Canada.

Jim Skinner, CEO at the Golden Arches, said the world’s largest hamburger chain finished dumping the oil with artery-clogging trans fats during the last few months. Speaking to investors at the company’s annual meeting, he also promised that pies and other baked goods would also be trans fat-free by year end. 

McDonald’s was among the first fast-food purveyor to vow to stop using trans fats, but it lagged the competition when it came to putting its money where its mouth is.

The company had its reasons. It said it was insuring a consistent taste for its french fries and looking for a supplier that could deliver enough trans fat-free oil to meet its needs.

Meanwhile, No. 3 hamburger chain Wendy’s was the first fast-food seller to swap to trans fat-free cooking oil in 2006. Yum Brands Inc’s U.S. KFC and Taco Bell chains completed their switch last year.

Burger King, the No. 2 hamburger chain, has promised to dump trans fat-containing frying oil by the end of this year. Until that happens, you can check out its nutritional charts to see how much trans fat it is serving up with your Whopper and fries.

For all the fuss made over the trans fat issue, you would have expected attendees of McDonald’s annual meeting to let up a cheer. Not so. Individual investors lodged new demands and divided into two camps: doggie happy meals vs.  kitty happy meals.
 

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First it was too bitter, now it’s too mild.

Will Starbucks ever get it just right with the coffee testers at Consumer Reports?

In March 2007, the magazine blasted Starbucks’ drip java for being too burnt and bitter, and said fast-food vendor McDonald’s had a superior brew.

In April this year, Starbucks rolled out Pike Place Roast, its new everyday brew, saying it had a “smooth, welcoming taste.”

In its latest missive, Consumer Reports  took a decidedly more tepid stance on Starbucks’ new joe. 

The magazine’s testers found Pike Place to be “a smooth cup of coffee with some bitterness, but not particularly complex.” Because the flavor is so mild, the tasters said,  adding cream, milk or sweeteners might overwhelm the coffee.

Do you agree with the Consumer Reports’ testers?

(Photo: Reuters)

Check Out a few bright spots in consumerville. 

McDonald’s posted a higher-than-expected quarterly profit on Tuesday, boosted by strong overseas sales. Coach also reported a higher-than-expected profit, helped by higher sales at stores in North America and Japan.

But the impact of a weak U.S. consumer and a weak U.S. economy was clearly on display as the earnings report began to  roll in this week.

Late on Monday, furniture maker and retailer Ethan Allen said its quarterly profit tumbled nearly 50 percent, hurt by restructuring charges and the weak economy. 

“Sales in March particularly slowed down due to broader economic concerns raised by the extraordinary intervention of the Federal Reserve to stabilize financial institutions, and to some extent due to Easter falling in March this year,” said Farooq Kathwari, the company’s chief executive.

McDonald’s sales fell slightly in March at U.S. restaurants open at least 13 months, prompting cautious investors to send its shares down 2 percent in premarket electronic trading.

There was also caution in the air at handbag retailer Coach.

“Due to the continued uncertainty in the economic backdrop, we believe that it’s prudent to wait until our fourth-quarter report to offer guidance for the upcoming fiscal year,” Coach’s Chief Executive Lew Frankfort said in a statement.

But Ethan Allen tried to infuse at least one positive note into its report:

“With a relatively calmer economic environment in April, and Easter behind us, the decline in sales so far has been considerably reduced,” the CEO said.

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(Photos: Reuters)

Check out the free coffee!
 
Starbucks will be handing out free 8-ounce samples of its new everyday brew called Pike Place Roast on Tuesday at 9 a.m. Pacific time (noon eastern).
 
But the free coffee is not just about generosity. Starbucks is counting on  the new coffee as one tool to help reinvigorate U.S. traffic, which has been slowing in recent months.
 
The Pike Place Roast brew is supposed to remind consumers of Starbucks’ early Seattle roots. The company says the coffee has a smoother flavor and finish.
 
The new brew is one of several steps Starbucks announced last month — including a new customer rewards program and new espresso machines — as it tries to draw customers back amid a weak U.S. economy and competition in the coffee business from McDonald’s.
 
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 (Photo: Reuters)