Breakfast for a dollar will become more varied than ever at McDonald's (MCD) restaurants early in January, a company spokesperson said Thursday. The choices, including the sausage McMuffin, sausage burrito, sausage biscuit, small coffee and a hash brown, will complement the eight lunch and dinner menu items currently available for $1 each in the U.S. It's a move that the company's management surely intends to combat a decline in U.S. sales that hit the burger maker hard in November.
The chain had been testing the dollar breakfast menu in Chicago, where Dunkin Donuts is also serving a variety of menu items for 99 cents each. In Kansas City, Mo., and Pittsburgh, Wendy's (WEN) will be testing its own revamped breakfast menu, which will surely include several items joining its 99 cent super value menu, with the intention of rolling it out nationwide in 2011. The chain's 2006 breakfast strategy was retooled due to slack demand. Analysts say these cheap breakfast offerings are a must for the chains in a period of unusually high unemployment. With "fewer people commuting to work, fewer people are coming in for breakfast," writes Paul Ziobro in The Wall Street Journal, logically.
People still have to eat, and as breakfast cereal prices rise in tandem with the shrinking of portions, breakfast for $1 or $2 is as good a reason as any to get out of bed in the morning -- at least, that's what McDonald's management appears to be hoping. "We know now, more than ever, our customers continue to look for everyday affordability wherever and whenever they choose to eat out," spokeswoman Dayna Proud said in the company's statement.
I can't help but notice the predominance of meat in these fast food menus, and especially the fact that the majority of McDonald's breakfast value menu items are based around sausage. It sparks my interest because I have watched as concern about cheap meat has become more and more mainstream; no confined animal feeding operation, or CAFO, is as destructive to environmental and human health as one in which pork is raised.
Journalists and food authors including Barbara Kingsolver, Michael Pollan, Eric Schlosser and, more recently, Mark Bittman, have written about how dangerous the production and consumption of cheap meat could be. They raised the alarm among those who read nonfiction books about food and extended articles in The New York Times Sunday Magazine. Then, in August, the issue was pushed into the awareness of mainstream America by a Time magazine cover story titled "Getting Real About the High Cost of Cheap Food," in which fast food didn't fare so well. Especially sausage. This quote is from the first paragraph of that story: "When the pig [raised in an environment of "stomach-churning stench"] is slaughtered, at about 5 months of age, he'll become sausage or bacon that will sell cheap, feeding an American addiction to meat that has contributed to an obesity epidemic currently afflicting more than two-thirds of the population."
That story seemed to open the floodgates, and I have heard the abbreviation "CAFOs" nearly every day since, in stories on NPR and the BBC, in my local newspaper, in USA Today. Ebullient, eccentric novelist Jonathan Safran Foer has put his fiction career on hold to tell everyone who'll listen that he doesn't eat meat because of these shocking pig and cattle farms. If I have any prediction to make, it is that in the next decade, Americans will have to face the way we have been raising meat with an unusual-for-us sobriety. Should that occur, prices will inevitably increase dramatically, we will eat far less meat, and fast food menus will look very different from how they look today.
In this climate, then, the moves by McDonald's, Wendy's and other quick-service establishments of their ilk could be described as a Hail Mary sort of strategy, a last hurrah before the era of cheap meat comes to an end. Or, they could lead to a heady reaffirmation of America's love affair with cheap meat (damn the costs to our bodies, or our bodies of water). For the customers of McDonald's and Wendy's and their management teams, the analysis comes down to "love" and "a dollar or less, please."
And there is one more thing. One characteristic of our depressed economy which McDonald's, Dunkin Donuts and Wendy's may have overlooked is the higher-than-ever percentage of Americans receiving food stamps. Here in Oregon, for example, the number of food stamp recipients is up 36% since mid-2008. These social service dollars are good only for purchasing food in grocery stores and other markets where it is intended to be taken home for consumption; fast food is considered "hot," and therefore can't be purchased with food stamps, even if it's a screaming good value.
How this dynamic affects the demand for fast food breakfasts is unknowable, but given a highly competitive market, broke customers, and the siren call of corn flakes, the going will surely be treacherous for the chains.
Basics of Diversification
Learn one of the fundamental concepts of building a portfolio.View Course »