Faltering McDonald’s a Sign of Struggling Lower Classes

McDonald’s is struggling. According to CEO Don Thompson, they have “lost some of their customer relevance.” By the numbers, McDonald’s had a two percent global reduction in traffic for 2013, and, for a company that does the kind of business it does, that’s a huge amount.

So what’s the problem? Thompson offered two main explanations:

First, customers willing to spend a little extra are gravitating toward what they feel are healthier or fresher alternatives. McDonald’s has attempted to spruce up its image with “premium” McCafé offerings, wraps, egg white breakfasts, etc. But this has not resulted in capturing the younger, more skeptical crowd.

For better or worse, most of the members of the rising generation’s customer base view McDonald’s as a cheap, unhealthful last-ditch option (like if they’re mostly drunk at 3 am and the nearest Waffle House is ten miles farther away than the nearest McDonald’s…). McCafé won’t change that. This is a deeply entrenched perception issue. It will be nearly impossible for McDonald’s to shake their current reputation.

McDonald’s would never change their name, and even investing in more “hip” restaurants has not gone so well. A hint of their involvement is absolutely hipster-repellent. Consider Chipotle, a restaurant that has done an excellent job crafting a future with the rising customer base. There was a rumor going around that McDonald’s actually owned Chipotle. This could have ruined Chipotle’s squeaky clean image, so they confronted the rumor directly on their website:

There is a popular misconception that Chipotle restaurants are owned by McDonald’s. While they were once an investor in our company, they divested in 2006 and our company went public on the New York Stock Exchange that year.

It’s a bad sign when other restaurants want to make sure everyone knows they have absolutely nothing to do with you. Anyway…

Second, Thompson mentioned that McDonald’s real customer base just doesn’t have as much disposable income. In his words, they aren’t “faring quite as well in the current economy.” This understatement is the real story here.

No matter what the pundits say about the upturn in the economy or the success of the “war on poverty,” the challenges that McDonald’s is facing indicate that all of this administration’s attempts to redistribute wealth has done nothing to make things easier for the poor. It has made things worse.

Inflation and unemployment have hurt the poor more than anyone else. And poor and middle class people are the main customer base for McDonald’s. The current economy favors the already rich. Not because it necessarily makes them richer, by the way. It’s just that rich people with lots of liquid assets aren’t harmed by inflation and unemployment to the same degree. They have a buffer.

If you’ve noticed the statistics on income inequality, everyone’s wealth is shrinking. It’s just that the poor and middle class wealth is shrinking at a much faster rate. McDonald’s sales acts as a barometer for the disposable income of the poor. In many ways, their struggle is hard evidence that Obama’s redistribution campaign has completely backfired.

Bottom line: you can’t benefit the poor by stealing from the rich (graduated taxes) or stealing from the future (debt). A real aggregate growth in wealth, which would benefit everyone, is possible—if the government would mind their business and let us mind ours.

93 responses

  1. “Faultering?” Don’t you mean “Faltering?” Shameful. Just shameful. If you’re going to use the written language to make your living, then please acquire a working knowledge of spelling, punctuation, syntax, etc. I’m sure I’m not the only one out there who would appreciate that.

  2. Cut corporate taxes.
    Cut personal taxes.
    Cut spending.
    Institute tort reform.
    Allow insurance to be sold across state lines.
    Institute tax-deductible health savings accounts.
    Reform Medicaid and Medicare.
    Enforce our EXISTING immigration laws.
    End the Fed.

    Give it a year or two and watch the economy come roaring back.

    • Mr. ain’t logical,

      Reform Medicaid and Medicare.

      Why do you want to grow the economy on the backs of the poor and the elderly?

      just wait, if you live long enough, you too will become elderly.

      • The disabled and elderly are facing tough times because their small incomes are being cut to fund ILLEGALS and their Anchor Babies.
        Americans are the most generous peopole in the world and do NOT

      • Both programs are absolutely FULL of waste & fraud.
        Start with that. Every 4 years, most politicians promise to do so, but it is never truly addressed.

        • Also eliminate Affirmative Action which forces the government to hire incompetent “quota dopes” who can scarcely read or write and are paid $50,000 to $100,000 a year because of their category. (I worked for a government and I know what goes on.)

          • Big ‘AMEN’ to that.
            Affirmative Action is a cancer on American productivity and the concept of fairness. Liberals are always moaning about ‘fairness’ – what’s ‘fair’ about giving someone a job because of the color of their skin, or their ethnicity? Nothing.

        • …I’M THINKIN’ that if we just removed those who aren’t of retirement age and or aren’t citizens, Social Security would be well into the “black”… the last time I visited the SS office, the only people who were speaking English was the security guard and myself… from estimates I’ve read, a solid third of those drawing SS benefits don’t qualify under the original mission statement…

          …REMOVE the non citizens and the obviously not disabled from Welfare, we could undoubtedly cut that program in half…

          • SSI and SSDI are huge and growing problems. “Crazy” kids getting hundreds of dollars a month and every night, there are law firms on late-nite TV advertising for people to apply for disability SS – physical and mental.

            Why work when you can mooch off the taxpayers?

          • …LIKE MOST socialist ideas, they sound good in the beginning, but they quickly morph into something sinister… give the elderly enough so they can rent a room, or move in with a son or daughter and be able to pay for room and board… take care of our disabled, again with enough to pay for room and board with a relative… who can argue with that?

            …I’M THINKIN’ if we ever get the nerve to actually do what HAS to be done ~ return all of the “social” programs to their original mission statement ~ there’ll be a lot of people screamin’ and protestin’… but if the Left hadn’t worked so hard to break-up the core of our country ~ the family unit ~ these people would be taken care of by their kinfolk… now, well, I’m thinkin’ they’re gonna die in the streets… it’s the law of the jungle…

            …WE’RE a rich enough country that we can afford to take care of our elderly and disabled… it’s the freeloaders that we can’t, and shouldn’t, take care of…

          • Precisely. These social welfare programs always start out with a fairly narrow and well-intentioned focus, but over time, the cultural Marxists have gradually expanded them to the point where widespread fraud and abuse becomes the rule rather than the exception.

            Every night I see TV ads telling people that if they believe they (or their kids…) have “mental disorders” to come in and sit with one of their attorneys who can help them successfully petition the government for SSDI benefits. It’s a huge and growing industry and it’s bankrupting the already endangered so-called “SS trust fund.” (A bunch of worthless IOUs.)

            People need to wake up or there will be rioting in the streets.

            Maybe that’s what it will take. Bring it.

          • …I’M THINKIN’ there WILL be rioting in the streets ~ actually, it’ll probably be much worse than mere rioting… which is why I keep reminding people to have a Plan, and a List of Things to Do when TSHTF… the last thing any of us should be doing is standing around wondering what to do…

    • Considering the massive and costly Obamacaid scam expansion of moocher Medicaid and the fact that only 48% of SS is actually paid to seniors, both badly need reform. Obama is also set to steal almost $1 Billion out of Medicare to help support his moochers and illegal’s, AFTER the next election of course.

      • A cut in the pay of the politicians would sound better. By the way, why are we paying $100 dollars an hour, and up for destroying our country? Pay them for the work that they do, which means that they do not get paid for vacationing several times a year and spending more on each vacation that we earn in five years. Money saved could be paid toward the country’s debts

        • Not a bad idea, but the amount of savings wouldn’t amount to a grain of sand against the $17T of on-budget debt to say nothing of the $40-50T of unfunded debt obligations. I’d rather double their salary if they would simply promise to not pass any more spending bills or come up with any more ‘stimulus’ initiatives.

          Send them home and mail them their checks.

          • Agree. Virtually every bill they pass raises taxes, reduces freedom and discourages individual responsibility and independence from the government teat.

            Better to pay them to do nothing.

      • Moocher Medicaid? Some people have been working all their lives and have paid into the moocher account. The gobbermint didn’t put that money into an interest bearing account. They placed it in the general fund and are now allowing ILLEGAL IMMIGRANTS to tap into this fund. WHY? To bankrupt the country, make the people rise up in anger to declare martial law and govern by fiat.

          • Instead of being stopped it is about 75% of the $3+ Trillion Obamacare scam which should be renamed Obamacaid.

        • Do your homework before you post. Medicare is the program we pay into. It is not in the general fund.
          Social Security, which is supposed to be essentially a “lockbox”, we have paid into for all off our working years. Medicare has not been around that long, but is paid for to some degree by payroll deductions, including deductions from Social Security payments.
          Medicaid on the other hand is free for those that have it. It is primarily a state run program and funded by the “tax payers”.

      • Not only there, he is trying to get into pensions and retirement accounts. We live on our pension as we were civil service and at that time did not pay into social security, so this is all we have! I also substitute teach to suppliment income and am trying to work more and more to keep head above water at 65 years old.

    • Now, there you go being logical again. You obviously didn’t receive your Phd. in Economics from Harvard did you!
      I did, I ordered it from an on-line source from Punjab. They mentioned that I was the second American to receive my credentials from them, said something about a Law Degree to some other fellow in a place named Chicago.

      • You don’t have to have a PhD (Pretentious Horseshit Degree) to recognize bad management when you see it. Anyone who can add and subtract knows our country is in a financial mess.

        • I like that one, PhD (Pretentious Horseshit Degree). Goes along well with my two favorites that are common in my industry, construction. We have PhD (Post Hole Digger) and MBA (Mighty Big Ass) to run said PhD with. I enjoy good comments and responses, they help me keep my “barnyard humor” tuned-up well. Have a great day, and Be Well………..

    • Great Plan ; although We”ll never acheve it without cleaning house in washington , enacting term limits & ending the life time benafit.

      • There’s no way they can clean house in DC without getting rid of the corrupt voting machines that count the votes the way the owner of the machine wants, not the actual numbers. Those machines will hand over the votes to the Dems like they did in 2012. That’s how Chuck Hagel got his plum job, his company’s voting machines in the areas where Romney was leading turned over the votes to Obama. A little tweak to the machine and it will report the votes the way the tweaker wants….

      • You cannot “clean house” in Washington if the stupid voters keep electing clowns like Feinstein and Pelosi. People get the government they deserve.

    • Gee, is that ALL it would take?
      Considering there is no will (read spine), to do any of those things, NOT EVEN ONE, in DC, guess we better ‘hunker down’. Winter is coming…

    • …SOUNDS LIKE a good plan, MrLogical… all we need now is to take control of the Senate, gain a super majority in the House (to override vetoes and e.o.’s)… pack both with Tea Party vetted politicians… and then we can begin to reverse course as early as late January 2015…

      …URGE your LOCAL Tea Party to PUBLICLY endorse candidates for the primaries!

      • That’s the plan, but frankly, we may have to (re)elect a few R’s and hold their feet to the fire in order to attain a Senate majority and increase our House majority. Regrettably, that may mean holding our noses on a few races.

        BTW, even ‘super majorities’ cannot override presidential EOs. Regrettably, they trump everything. Shouldn’t be that way, but it is.

        By all means: VOTE for the most conservative candidate that’s on the ballot in ’14 and don’t ‘stay home’ out of spite or because of peevish reasons of ideological purity. That’s how we got stuck with Obama again in 2012. Romney wasn’t my ideal candidate, but he would have been FAR better than having a Commie in the WH.

        • …ARE YOU SURE about not being able to override an e.o.? I’ve been told by some people who “should” know about these things that it takes a 2/3’s vote by either the House or the Senate to nullify an executive order…

          …REGARDLESS, once we’ve regained control of our government, a few things will need to be tweaked, or redefined, like the proper use of executive orders, separation of church and state, anchor babies, rules for the Senate and House…

          • …SO MY LAST hope for a peaceful change has been dashed upon the rocks of reality… guess I better buy another 100# bag of rice, and another 1000 rounds of ammo… just as soon as the ICE melts!

          • I’m not a constitutional scholar or lawyer, but it’s my understanding that while Congress can’t undo these EOs, the SCOTUS can rule them unconstitutional (if they are..) and that future presidents MAY be able to counter them, or at least modify/temper them.

            So, perhaps all isn’t lost – at least not yet.
            However, with this prez’, it’s kind of a crap shoot.

          • …AS I have been informed, it takes a 2/3 majority in both the House and the Senate (I had been under the delusion that the branch that authored the bill could override with a super majority)… super majorities in both the House and Senate are rare ~ it is our bad luck that it occurred a few years ago… AND SCOTUS can no longer be trusted, since 0 obviously has some serious dirt on Chief Justice Roberts…

            …DID you hear that Drudge just recently tweeted: “have an exit plan”… no amplification, just those 4 words… but I can’t imagine Drudge, with tens of millions of people following him, would just throw that out unless it actually means something… I’m hoping his account was hacked and this is a hoax…

  3. I imagine that a portion of the decline in sakes has to do with the “healthy” mandate. Most of the burgers taste like crap without the old seasonings.

  4. Really! They advertise to attract every hip hop rapping gang banger in town. Guess what they can take their gang bangers and hip hoppers and their burgers and go to hell. I’m “lovin it”

  5. Well, I think this article explains the failure of wealth redistribution better than any other I have read. Will it be McDonald’s that finally wakes up the American public?

    • If the public has not awakened after 50 years of government incompetence and mismanagement, it certainly won’t now. Look what they elected for president!

  6. McDonald’s can thank business stupid Obama and his goons for their job destroying policies. Their gullible base is unemployed or now working part-time. Black unemployment, as one example, has doubles under Obama and his planned amnesty scams assure it will stay that way.

  7. you liberals out there that are so happy to vote in and support your liberal “leaders” that are now in the process of running our country into the ground, take a good look at detroit and thereby get a glimpse of what the entire country is headed if those liberal communistic “leaders” continue. Remember that detroit has been under democratic/liberal “leadership” since about 1960. I doubt that it will take that long for the liberals to cause the remainder of the USA to become detroit. Already several large cities under democrats control are becoming close now….

    • Also take a look at once-great cities like Philadelphia and Washington DC, along with Miami, that are becoming crime-ridden hellholes on the way to bankruptcy. Back in the 1970s someone predicted that major American cities in the 21st Century would be “90% Black, and bankrupt.” That is coming to pass.

  8. McDonald’s has decided that Blacks are it’s target market…from 365 days of Black History (untrue tales of BS) to their advertising.

    I’m a big believer in letting companies decide who they’d like to be their customers. I’ll never go to another McDonalds…not their target market….Starve Guys!

  9. And when they raise the minimum wage places like McDonalds will hire fewer people and raise their prices. So it only gets worse!

  10. i would like to see some real numbers on market share. everyone’s disposable income is decreasing, and i bet it is across the board

      • …I THINK Coffee49 was merely stating a fact… perhaps YOU should have offered a solution… something viable… something that might work…

      • If our beloved president and the new york governor would approve keystone and nat gas drilling we could in time put the muzzies out of business

      • Simple solution get rid of this anti American Muslim jihadist illegal president and the tax loving Democrats and RINOS. Problem solved.

  11. Use to eat their fish filet every friday, but this pass year the sandwich is always over cooked, more bread then fish & tastes like cardboard. Maybe michelle has been advising them on how to cook, now she is signed up with subway, my guess they will be in the same boat, no one wants to buy tasteless crappy food no matter who the chef is

    • Why go to fast food joints in the first place? It takes about ten minutes to cook a good burger at home, and it is a lot cheaper. People are just too lazy to prepare their own meals. Good, let them waste their money…..

  12. Prices at all fast food resturants are rising and that’s why people are not able to go there. So what will happen if minimum wage goes to $15? No customers that’s what.

    • If the minimum wage goes to $15 there will be mass layoffs, and equally mass hiring of illegals from Mexico who take cash under the table. This is already common in many food-processing industries.

    • …MY SENTIMENTS exactly, TPS12… when a Big Mac costs $10 (without fries or soda), the few who kept their jobs after the MASSIVE “minimum wage layoff’s” will also lose their jobs…

    • Don’t forget when you buy one biscuit in the morning the sales tax is between 34 cent and 74 cent depending on which biscuit you buy,.and they say virginia is for lovers it is tax taking lovers.

  13. I seriously thought that only the Niggers;Illegal Aliens, and white trash on Welfare; SNAPS and medicaid ate this fast food garbage!!!
    retired expatriate (10.5 years) MD

  14. Cut taxes – reduce government intrusion in business via enumerable taxes and regulations! Government must leave businesses alone.

  15. I see where places like Burger Kings, McDonald’s and others are struggling and it is they have not changed with the times. Years ago it was hip to go to a places to save time but times have changed. I see places like, In & out, Five Guys, and Apollo (a local favorite) have people lined up outside the doors. It is because the items they serve are fresh and taste good. Instead of pre-cooked and then put into a microwave to be warmed up. If you think this is good food you are just fooling yourself. One of my pet peeves in life is, I do not want to throw away good money away after bad food.

    • …NOT SURE where you’re from, paulrph1, but I’m not seein’ folks “lined up outside the doors” anywhere…

      • I am from Utah and I do see people lined up in cars going into IN and Out burgers here. There will be cars lined up ten deep and they even have a ticket taker that comes out to get their order to cut down on the wait. I do not see it all of the time but the Jack in the box and the McDonald across the street do not have hear the crowds. But I do know that the only one you might have is Five Guys. The others are purely western or local. By the way lined up out the door was just a metaphor for a loud crowd.,

  16. Went in to get a burger meal… $12 for two of us. Heck, I could have had a sit down meal for two for $2 more. There is no value in fast foods anymore… especially when you consider that we pay for their food stamps and health insurance on top of that. A sandwich at the grocery store is the value nowadays.

    • At the supermarket you can buy enough ground beef to make three burgers for the price of one at a fast-food joint.

  17. McDonald’s has always been notorious for selling cheap, unhealthy food to lower-income people, and paying its employees rock-bottom wages. Phase it out – good riddance.

  18. Personally I have always thought mickey d’s was sh*t. I stopped eating there when I was in Junior High and that was 50 yrs ago, I was 12!!

  19. We need the Fed.

    We are no longer an economy of 90% farmers that feed themselves.

    We are a nation of people with no Victory gardens that will starve if there was no Fed.

  20. No, People are getting sick and tired of giving money to corps. that give heavily to Anti- Constitutional efforts!!!. Ie. Gay Marriage, Eco terrorism, social justice, communist plots, Anti-gun, Anti-Christian, Pro-muslime, SUPPORT FOR DEMUBLICAN AND REPUBLICRAT PROGRESSIVES!!!!!..** PERIOD **

    • No, you give the general public far too much credit for discernment. They are not making a judgment call, they simply can’t afford to bring the kiddies out and drop 30 bucks. Besides, McD’s has kept itself clear of the culture wars and refused to take sides.

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