In the long-run, profits equal zero, and for McDonald’s, the end maybe sooner than later. In my opinion, their demise started with the dollar menu bonanza and ended with the 24 hour breakfast menu. When a company starts changing that means their current outlook doesn’t look good, so changes are made to maintain the desired profit margins. McDonald’s continues to rebrand itself in international markets to cater to local tastes, shrimp in Chinese locations etc. But in the US, revenue and customers have peaked, and for the past ten years, the innovator of fast food has struggled to meet the curent expectations set by their competitors and demanded from their shrinking, older customer base.
Despite whatever McDonald’s brass thinks, they are not Starbucks, Chikfila, or Five Guys and they never will. Apple didn’t try to be IBM, Amazon didn’t try to be Walmart, and so on. Newcomers innovate, that’s what changes the balance of power in markets. McDonald’s is failing to innovate, they’ve been playing catchup for over a decade, and it’s beginning to show. I see them quickly turning into a food tech/information company, and that’s a huge decline from the golden arch fastfood institution with the fun movie and toy promotions we all grew up not being able to live without.
People went to McDonald’s for everything but the food, maybe the fries, now there’s nothing left but the food and it’s no longer a dollar or two; that is unless you give them all your information and let them track you with their new app, then most of your food is free. If anyone bothered going to McDonald’s anymore, I’d suggest you notice next time you’re in the not-so-busy drive thru, few people pay anymore, they just get their app scanned. Not sure how well that business model looks moving forward. Sell and short Mickey D’s until further notice, be awhile before I’m back.