Shop Talk

Retailers, consumers and prices

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

Photo

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.

Check Out Line: Upset tummies in the food sector?

Photo

mcd1Check out sluggish results in the U.S. food sector.

Fast food giant McDonald’s and Kroger, the largest U.S. grocery chain, saw shares decline 2.5 percent and 10 percent, respectively, after reporting weak results.

McDonald’s said same-store sales at its U.S. restaurants slipped 0.6 percent in November, marking the second straight monthly decline. Following Yum Brands’ recent weaker-than-expected sales, it was the latest sign that the fast-food sector that had performed well through most of the recession was weakening.

Check Out Line: Earnings season in full swing

Photo

Check out this morning’s lineup of quarterly results.

hersheyHershey said price increases helped offset rising cocoa costs, but was silent on the biggest news in the chocolate world — will Cadbury be acquired?

Meanwhile, cigarette makers Philip Morris International and Reynolds American topped expectations and raised their full-year forecasts.

Thrifty tips from Starbucks

Photo

barista1In its battle to end the myth of the $4 Starbucks coffee — the world’s biggest cafe chain is offering tips on how to save money in its cafes, which are lowering prices on some beverages as they battle market newcomer McDonald’s.

Here are some tips from Susan Nodilo, manager of a popular Starbucks in West Hollywood.

On the front lines of the coffee war

Photo

mcdonaldsstarbucks2By Laura Isensee

On her way to work in downtown Los Angeles, banker Teresa Roman recently picked up a large iced vanilla coffee. Her cup had no green mermaid, the iconic Starbucks symbol. Instead, it displayed McDonald’s famed golden arches.

Roman switched from Starbucks iced coffee to McDonald’s when the fast-food giant started selling lattes, mochas and cappuccinos as part of its McCafe beverage expansion that launched officially earlier this year.

Check Out Line: Can a $298 laptop jump-start back-to-school?

Photo

schoolbus2Check out efforts to get serious back-to-school shopping underway.

Wal-Mart announced plans to start selling on Sunday a Compaq Presario laptop for $298.

Gary Severson, Wal-Mart U.S.’s senior vice president of home entertainment, told Reuters he thought the deal represented a “screaming value.”

McDonald’s CEO (aka “hamburger guy”) on economy

Photo

skinnerronaldReuters asked the chief executive of McDonald’s, one of the world’s biggest companies and a closely watched gauge of consumer spending,  what every investor wants to know: Has the economy hit bottom?

“In the United States, there is some argument to say that these green sprouts that are showing relative to economic growth are pointing to the fact that we might have (hit) bottom and now it’s starting to grow.

Check Out Line: Slurping up strong sales at McDonald’s

Photo

CHINA-MCDONALDS/Check out those sales rising at fast-food giant McDonald’s.

The burger chain said its April sales at restaurants open at least 13 months rose 6.9 percent rise in April. In the U.S. alone, April same-store sales increased 6.1 percent, helped by new coffee drinks and chicken snack wraps.

Fast-food restaurants have generally held up better in the recession than higher-priced sit-down restaurants. 

Starbucks strikes back

Photo

sbuxbewareStarbucks wants you to know that it is not the home of $4 coffee, and it’s launching a multimillion-dollar ad campaign to make sure you get the message that its brew is not an expensive luxury.

“Starbucks coffee does not cost $4,” Chief Executive Howard Schultz said this week when he announced the new ad blitz. The ad at left will run on Sunday in the New York Times.

Check Out Line: Value is still in

Photo

mcd1Check out the consumer thriftiness still reflected in corporate announcements.

McDonald’s, the world’s largest hamburger chain, posted a higher quarterly profit that beat analysts’ expectations.

It also said April same-store sales were trending at least as strong or better than first-quarter sales in every part of the world.

  •