I was driving through a McDonald's pick-up window this morning when I heard the earnings news.

As a fairly regular McDonald's customer, I feel I can explain the headwinds that they face. Their problem is that their food is too expensive for what it is. Their fish sandwich is a tasty little thing, but "little" is the operative word. It has a patty of fish the size of a postage stamp, and it costs $3.99! In order to eat to my own satisfaction at McDonald's, I have to get at least two "entrees" — something like a fish sandwich and a "southern style chicken" sandwich (read "knock-off Chick-fil-A"), but by the time I've paid for that, I could have had an excellent, fresh meal at Chipotle. Similarly, if I order one of their "premium" burgers like the "Angus" whatever, I'll get a burger that's been microwaved and is not particularly fresh, and I'd pay the same price as that of a much, much better product at Five Guys.

Probably there are better economic opportunities on their "dollar menu", but they don't put those front and center — they try to pitch to the high end (relatively speaking), and they're just not competitive there.





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