• 23 Jan 2013 at 12:54 PM

The McRib is Not the Answer

I don’t know what exactly it is a metric of—the economic crisis? healthier eating habits? better taste? the inexplicable success of that extremely annoying actress playing Wendy in the commercials? the cannibalization of its flagship product by the McRib?—but a McDonald’s milestone has been delayed.

According to leading economists and actuarial scientists (McDonald’s itself no longer calculates such things), Ray Kroc’s little hamburger stand was poised to sell its 300 billionth burger this year. But no more.

A recent slowdown has likely delayed that. Sales slowed throughout 2012 and, in October, McDonald’s had its first year-on-year drop in comparable sales since 2003….

A sales rebound in November as a result of new offerings such as cheddar, bacon and onion burgers and the reintroduction of the McRib in December likely salvaged the full quarter from a revenue decline. But menu tweaks will go only so far in addressing a fundamental problem: Fast food isn’t the growth business it once was.

While that is probably a wonderful thing for humanity and for U.S. healthcare costs, it’s not so great for McDonald’s and the rest of the “informal eating out” crowd. But the Kingdom of Arches did, at least, top analysts’ estimates this morning by five cents a share, thanks to the McRib and the Dollar Menu.

Net income increased to $1.4 billion, or $1.38 share, from $1.38 billion, or $1.33, a year earlier, the Oak Brook, Illinois-based company said today in a statement. Analysts projected $1.33, the average of 28 estimates compiled by Bloomberg.

Chief Executive Officer Don Thompson boosted advertising of the chain’s dollar menu items, such as McDouble burgers and McChicken sandwiches, to draw Americans as consumer confidence falls. Sales at U.S. stores open at least 13 months rose 0.3 percent in the quarter. Analysts projected a 0.5 percent drop, the average of 22 estimates compiled by Consensus Metrix.

For actuarial purposes, do McDouble burgers count as two burgers on the long, arduous road to 300 billion?

McDonald’s 300-Billionth Burger Delayed [WSJ]
McDonald’s Profit Rises as Dollar Menu Drives U.S. Sales [Bloomberg]

46 comments (hidden to protect delicate sensibilities)
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Comments (46)

  1. Posted by Guest | January 23, 2013 at 1:04 PM

    Why are actuarial scientists making this calculation? I can see why they'd be interested in how many burgers an individual is eating, but I'm unclear as to why / how they would be calculating how many burgers are being eaten in aggregate.

  2. Posted by Matt's Mom | January 23, 2013 at 1:05 PM

    Fewer quotes, more charts!!

  3. Posted by Matt's Mom again | January 23, 2013 at 1:18 PM

    Didn't your mother ever teach you never start a sentence with but?

  4. Posted by Matt's Intern | January 23, 2013 at 1:29 PM

    Jon still uses a mouse in Excel, and even then, does so poorly.

  5. Posted by Guest | January 23, 2013 at 1:30 PM

    Being the CEO of McDonalds seems like an easy job. Stop selling the McRib in one quarter – celebrate the increase Big Mac sales; start selling the McRib next quarter – celebrate overall revenue growth. Rinse, repeat.

  6. Posted by Danker_Banker | January 23, 2013 at 1:39 PM

    The guy sitting next to me on the plane with the seat belt extender is proud to be doing his part in reaching 300B

  7. Posted by Guest | January 23, 2013 at 1:42 PM

    Jon Shazar is a Mo'

  8. Posted by Chris Christie | January 23, 2013 at 1:50 PM

    Hey!

  9. Posted by Guest | January 23, 2013 at 1:56 PM

    Shazam ! Shazamwdich.

  10. Posted by Im_a_Dude | January 23, 2013 at 2:01 PM

    Jon, do you know what they call a Big mac in Paris?

  11. Posted by Guestalt | January 23, 2013 at 2:05 PM

    Matt writes an interesting article about shadow banking, and Shazar writes about the McRib. That's about right. Shazar's becoming a fucking caricature of himself

  12. Posted by Administration | January 23, 2013 at 2:20 PM

    How DARE you question my incompetence, negligence and lies! I am a member of the Obama Administration, and EVERYTHING we have done is the fault of the REPUBLICANS!

    ~Any Member of the Obama Administration

  13. Posted by Guest | January 23, 2013 at 2:23 PM

    In Soviet Russia, the McRib eats you.

  14. Posted by Guest | January 23, 2013 at 2:35 PM

    I would like one McRib and a chocolate Shazake please.

    -Leroy Jenkins

  15. Posted by Fine, I'll say it | January 23, 2013 at 2:56 PM

    I happen to know everything there is to know about McRibs. I love McRibs. I love McRibs with French Fries. I love them with a large Coke. And I take McRibs and put them in my hair when I've had a rough week. What do you think holds it up, slick?

  16. Posted by Buzzword Strategy | January 23, 2013 at 3:08 PM

    Do you get some techniques to evade end satisfy commencing being stolen? I'd definitely be pleased about it. The weather will be excellent for spring wine tasting in Bettigen. Just passed CFA level1 I am on fire now to the top.

  17. Posted by Guest | January 23, 2013 at 3:56 PM

    Stay on topic please. Don't corrupt something as sweet and innocent as a Big Mac with politics.

  18. Posted by Quant me maybe | January 23, 2013 at 4:08 PM

    Translated back into Ukranian your post looks like this:

    Ви отримуєте деякі методи, щоб уникнути кінця задовольнити починаючи крадіжки? Я безумовно радий цього приводу. Погода буде відмінно підходять для весни дегустація вин в Bettigen. Просто пройшло CFA level1 я у вогні тепер на самому верху.

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  19. Posted by VonSloneker | January 23, 2013 at 4:10 PM

    Agree to disagree…red is smokin'

  20. Posted by Deleveraging | January 23, 2013 at 4:13 PM

    Do your shareholders and society a favor. Cut your menu to one item, coffee. If you need to run promotions; have box burning contests.

  21. Posted by Jon's mom | January 23, 2013 at 4:29 PM

    Jon sucks.

  22. Posted by Guest | January 23, 2013 at 5:18 PM

    The redhead in the Wendy's commercials actually is Wendy Thomas…

  23. Posted by HungryIntern | January 23, 2013 at 9:05 PM

    Ukranian?, can we get that in the mother tongue, everyone east of Kiev.

  24. Posted by GueSt | January 24, 2013 at 4:10 PM

    It sounds like sitting in coach is the NKI…

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