McDonald’s: Lovin’ the Profits while Targetin’ the Poor

February 26, 2009

mcdlogoInflation is, what, at near 0 %, if not projected to go negative in 2009?

A world-wide economic recession lasting one to two years is the most optimistic outlook.

And how do the masters of franchising, globalization, and supply efficiencies respond?

They not only identify those they’ve identified to be least able to resist (ie. the poor) but increase prices to those communities.

Some could be consider this a blatant opportunistic  predatory pricing scheme by a brand bully.

Kudos to http://www.news.com.au and  Frances Stewart in Australia for an article called McDonald’s to charge more in poorer suburbs.

McDONALD’S is lifting prices in poorer suburbs where it believes consumers are more likely to accept higher charges without complaint.

Costs were previously based on restaurant overheads and ingredient prices.

But the multi-national fast-food chain is using socio-economic factors to determine charges under a new “demand-based pricing” scheme.

I love Australian franchisees because you know where you stand:

A McDonald’s franchisee, who asked to remain anonymous, said the biggest price rises were concentrated in low-income areas.

“In general, the poorer suburbs will pay more,” the franchisee said.

An accompanying television clip (see McDonald’s rip-off) says that McHappy meals will increase by 16.5%.

And how is this affecting McDonald’s USA where the profits eventually go? Here’s a sample of headlines about Oakbrook’s 2008 results:

I wonder what role “socio-economic factors” and “demand-based pricing schemes” have played in differential within North American communities?

In Canada, 1 in 5 children live in poverty.


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