McDonalds, a US restaurant staple and international success, has shown continued increases in stocks despite the prediction of market analysts. And the success behind this continued growth is said to be through their low priced menu items such as $1 drinks of any size and the low prices on their value menu. Changing its focus from chasing the higher end burger chains like Five Guys, they are seeing more customer visits in part of what they call a high/low menu strategy. By attracting customers with advertisements of their low price high value menu items, and offering semi-customizable burgers and sandwiches that are more expensive than other main-stay menu items but still cheaper than their competitors, this has allowed McDonalds to maintain profit margins. And with the profits they will be adding such amenities like self-order kiosks, delivery, mobile ordering, and remodeling of the restaurants themselves, this is setting itself up for long-term growth.
I believe that McDonalds is also successful through their intensive distribution models as well. 75% of the population in their biggest markets are said to live less than 3 miles from a restaurant. The wide availability of McDonalds in part with their marketing to the lower prices is driving them to see profits where they normally would not. They tried to expand the scope of who their customers were and saw failure, switching back to focus on what they are known for though was smart and the planned expansion of stores with delivery remodeling is going to see them stay in profits far longer than trying to change.
Peter Rinaldi
https://www.wsj.com/articles/mcdonalds-profit-rises-refranchising-drive-dents-revenue-1508851452
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