tag:blogger.com,1999:blog-15300956.post4009882805877150987..comments2008-04-02T16:28:18.738-05:00Samuel D. Bradleyhttp://www.blogger.com/profile/14650475595508748959noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-15300956.post-77285387054075295622008-04-02T16:28:00.000-05:002008-04-02T16:28:00.000-05:00Billy, the problem seems to be specifically focused around the dollar menu items.<BR/><BR/>Since most fast food places have $1 items, you lose a competitive advantage if you get rid of your $1 items.<BR/><BR/>There is obviously very little (or no) profit in a $1 double cheeseburger at McDonald's.<BR/><BR/>But gasoline and beef prices are rising, so expenses are rising. If you cannot raise the $1 items, you raise the price of regular items AND value <B>meals</B>.<BR/><BR/>However, when you raise these prices, people flip to the $1 items. So they just stop buying value meals and buy no-profit items. <BR/><BR/>As long as you are anchored to the $1 items, it seems impossible to raise the other prices without losing volume on the higher profit items.<BR/><BR/>A catch 22.Samuel D. Bradleyhttp://www.blogger.com/profile/14650475595508748959noreply@blogger.comtag:blogger.com,1999:blog-15300956.post-27503582134039957352008-04-02T08:58:00.000-05:002008-04-02T08:58:00.000-05:00Sam -<BR/><BR/>I've not read the article in AdAge, but I'm surprised to hear that value meals are hurting the fast food industry. Can you imagine McDonald's or Burger King without the burger, fry and drink combo? <BR/><BR/>So, what is the solution? More healthy value meal options? If so, how do these chains do that without completely changing everything there is about their brand. <BR/><BR/>In my opinion, that's a tough one.Billy Fischerwww.babrain.com/blognoreply@blogger.com