NationStates Jolt Archive

I was told by a friend some time ago that with everything factored in, a McDonald's franchise restaurant would go under if customers were to buy simple hamburgers to the exclusion of all other products. Something about pricing the burgers artificially low to encourage people to buy their fries and soft drinks, where they make a killing.

Can anyone confirm this, or is this just still more consumer myth?

Taking into account having Justin Timberlake sing their theme song and such it's believable, but I have no proof.

I was told by a friend some time ago that with everything factored in, a McDonald's franchise restaurant would go under if customers were to buy simple hamburgers to the exclusion of all other products. Something about pricing the burgers artificially low to encourage people to buy their fries and soft drinks, where they make a killing.

Can anyone confirm this, or is this just still more consumer myth?
all burgers? meh, i dunno compare a whopped price to the price of the smallest whopper meal and figure it out yourself, and if this is true for mcdonalds it true foreverywhere else where the pricing set up is exactly the same -_- 99 cents for a cup of ice an ounce of soft drink (thats why i dont get ice, the drink has to be kept cold anyway and you actually get more than a few ounces)

I'm sure there are ways to make a trip to any given fast-food outlet more affordable, but that's not what I'm digging for...

Is there any truth to this burger-pricing rumour I've heard?

Who Cares?

Thats McGoodness for you. Anyone seen SuperSize Me?

Thats McGoodness for you. Anyone seen SuperSize me?
Yep. Made me hate McPukes even more.

I was told by a friend some time ago that with everything factored in, a McDonald's franchise restaurant would go under if customers were to buy simple hamburgers to the exclusion of all other products. Something about pricing the burgers artificially low to encourage people to buy their fries and soft drinks, where they make a killing.

Can anyone confirm this, or is this just still more consumer myth?

They're making a profit on everything, but the margins on fries and drinks are humongous compared to everything else. Basically the burgers are there to entice you to buy stuff that really rakes in the cash.

Last time I checked, even the hamburgers and cheeseburgers at McDonalds were expensive...

I kind of feel like they're screwing me over with everything. If those prices for those burgers are artificially low, I'd hate to see them at their normal rates.

Everyone: Just make your own damn burgers.

Everyone: Just make your own damn burgers.

That assumes we're not absurdly lazy.

Well, the notion that McDonald's could be brought to their knees through consumers buying their product tickles me to no end. This is why I brought it up in the first place.

Yes, making your own is always better, but if buying a McDonald's hamburger (no fries, no drink, no Happy Meals or combos) will stick it to their bottom line, then HA HA HA, I'll bite...!

To say McDonalds would fail if it only sold hamburgers is such an obvious statement. The entire menu is interconnected. And all parts are important to McDonalds.

all burgers? meh, i dunno compare a whopped price to the price of the smallest whopper meal and figure it out yourself, and if this is true for mcdonalds it true foreverywhere else where the pricing set up is exactly the same -_- 99 cents for a cup of ice an ounce of soft drink (thats why i dont get ice, the drink has to be kept cold anyway and you actually get more than a few ounces)

The pop + ice cost are almost the same per weight. It costs about 20 dollars for 80 concentrated litre pop .

These places make money on soda...

it's all a well balanced and well choreographed method of making the money most effectively.

if the regular hamburgers sell well, the price for them will just go up

ya'know what would make them go under even faster? If no one went there because they're shit.

McDonalds would just jack up the price of a hamburger and lower those of fried is response. Nothing would change in their earnings at all.

Yep. Made me hate McPukes even more.
I was only eating fish and chicken at the time I saw it (since then I've tried steak and other stuff I haven't eaten in 12 years).
Watching the scene where he gets the McPukes made me doubt my decision to eat red meat again. Even if it's not from McPuke.

I don't know this for certain, but my guess is that hamburgers would have less of a price markup compared to the wholesale cost of their ingredients than other things like fries and soft drinks, and therefore make the company less profit. I don't know what fries or drinks cost at McDonalds, since I don't eat there, but I imagine that it would be much, much more than the cost of the raw ingredients (potatoes, cooking oil, water, sugar syrup). Meat is much more expensive than those ingredients, and if McDonald's tried to mark up their burgers by the same percentage, they would probably cost too much for anyone to want to buy them.
So I don't know if McDonald's would go out of business if they only sold burgers, but other things on their menu are probably making them a lot more money.

Well, I'd say that it is entirely possible (and likely) that this is true... Perhaps not to the degree in which you've heard (that they'd go under if people were to suddenly only buy burgers), but I'd bet this tactic is used...

It happens all over the place... Take Wal*Mart for instance... They pretty much lose money on sales of paper goods and cleaning supplies (paper towels, toilet paper, napkins, dish soap, laundry soap, etc)... Because they lower those prices to rock-bottom and below...

Why? Because that's the stuff people have to buy... The Wal*Mart powers that be know that people will always have to have toilet paper (for instance)... So, the trick is to draw people to buy your toilet paper...

Then, once you've gotten them in the door, it is likely that they'll start buying other stuff at your store while they're there... And, it's likely that they'll make it a habit of coming to your store, because the prices are so "low" (on the things they buy the most)...

The same applies to the "sale" items... They'll sell some TVs for a huge loss...but only because coming in to buy those "incredible deals" draws customers that will change their minds and opt for the better (more expensive, and higher profit margin) TVs, or perhaps throw in a DVD player with their cheap TV purchase... And heck, while we're in the store, spending a few hundred dollars, anyways, we might as well buy some other things, like DVDs, video games, CDs, maybe some clothes, some soda, etc, etc...

It works, and it works well...

Oh, and here's another dirty little secret Wally World doesn't want you to know:

You know those little paper price flags hanging off the shelves in front of some items? The ones with the catchy, colorful top, and a big, bold price printed on them? Those are sale flags, right? Not always... The generic ones, that just have the Wal*Mart logo on them, those items are all regular price... They just slap those flags on them to trick you into thinking that item is on sale... The ones that actually say something like "Rollback" or "Save on their Sale" or whatever, those items have had a price drop... But the ones that are just generic and just say Wal*Mart (and usually, "Always Low Prices, Always"), those items are still just regular price...

And that works, too...

How do I know these things? I worked for the place for nearly 5 years... And believe me, it's a really dirty game...lol

So for Mickey D's to be doing this, I can believe it...

Going for a McShit. (http://www.urbandictionary.com/define.php?term=mcshit&r=f)

I was told by a friend some time ago that with everything factored in, a McDonald's franchise restaurant would go under if customers were to buy simple hamburgers to the exclusion of all other products. Something about pricing the burgers artificially low to encourage people to buy their fries and soft drinks, where they make a killing.

Can anyone confirm this, or is this just still more consumer myth?

Partially true. Cheap burgers get you to bring your family + friends there. Most buy more than 99-cent burgers. Biggest profit-makers are drinks and fries. But, if everyone bought only 99-cent burgers, they would change their operations/system, and still make a profit. For example, they would minimize their kitchen and fire half of their employees.

Well, I'd say that it is entirely possible (and likely) that this is true... Perhaps not to the degree in which you've heard (that they'd go under if people were to suddenly only buy burgers), but I'd bet this tactic is used...

It happens all over the place... Take Wal*Mart for instance... They pretty much lose money on sales of paper goods and cleaning supplies (paper towels, toilet paper, napkins, dish soap, laundry soap, etc)... Because they lower those prices to rock-bottom and below...

Why? Because that's the stuff people have to buy... The Wal*Mart powers that be know that people will always have to have toilet paper (for instance)... So, the trick is to draw people to buy your toilet paper...

Then, once you've gotten them in the door, it is likely that they'll start buying other stuff at your store while they're there... And, it's likely that they'll make it a habit of coming to your store, because the prices are so "low" (on the things they buy the most)...

The same applies to the "sale" items... They'll sell some TVs for a huge loss...but only because coming in to buy those "incredible deals" draws customers that will change their minds and opt for the better (more expensive, and higher profit margin) TVs, or perhaps throw in a DVD player with their cheap TV purchase... And heck, while we're in the store, spending a few hundred dollars, anyways, we might as well buy some other things, like DVDs, video games, CDs, maybe some clothes, some soda, etc, etc...

It works, and it works well...

Oh, and here's another dirty little secret Wally World doesn't want you to know:

You know those little paper price flags hanging off the shelves in front of some items? The ones with the catchy, colorful top, and a big, bold price printed on them? Those are sale flags, right? Not always... The generic ones, that just have the Wal*Mart logo on them, those items are all regular price... They just slap those flags on them to trick you into thinking that item is on sale... The ones that actually say something like "Rollback" or "Save on their Sale" or whatever, those items have had a price drop... But the ones that are just generic and just say Wal*Mart (and usually, "Always Low Prices, Always"), those items are still just regular price...

And that works, too...

How do I know these things? I worked for the place for nearly 5 years... And believe me, it's a really dirty game...lol

So for Mickey D's to be doing this, I can believe it...

It's a marketing concept called the "Loss Leader".

You sell a product that everyone needs (Baked Beans are a favourite), and you can afford to take a massive hit on the price, just to ensure you undercut the competition, because nobody goes and just buys Baked Beans.

Loss Leaders aren't really all that sneaky, though.... the SNEAKY one is closing down most of the registers (so people MUST queue), and stacking candy and magazines by the register, so people will pick them up while they are waiting to be served. (What they call Point of Sale marketing).

Note: Wal-Mart have taken this to something of an extreme - since they even sell movies at Point of Sale now...

It's a marketing concept called the "Loss Leader".

You sell a product that everyone needs (Baked Beans are a favourite), and you can afford to take a massive hit on the price, just to ensure you undercut the competition, because nobody goes and just buys Baked Beans.

Loss Leaders aren't really all that sneaky, though.... the SNEAKY one is closing down most of the registers (so people MUST queue), and stacking candy and magazines by the register, so people will pick them up while they are waiting to be served. (What they call Point of Sale marketing).

Note: Wal-Mart have taken this to something of an extreme - since they even sell movies at Point of Sale now...

Yeah, when I worked in a Wetherspoons pub I was expected to suggest things they might like to buy with their drinks. Now, "Would you like anything else?" is fine, but that's taking the piss. Nobody did, of course.

I personally can't comprehend why people eat at McDonald's in the first place. Why? Is it the advertising? I just don't understand... :confused:

I personally can't comprehend why people eat at McDonald's in the first place. Why? Is it the advertising? I just don't understand... :confused:


I try to avoid it if possible. But they are open 24 hours, take credit, and are on the way home from the pub.

I try to avoid it if possible. But they are open 24 hours, take credit, and are on the way home from the pub.

:p

I personally can't comprehend why people eat at McDonald's in the first place. Why? Is it the advertising? I just don't understand... :confused:

A combination of factors. Advertising is very high on the list, which is why all fast-food outlets clamour for prime-time slots on television. Most people are very easily lead by repetition... and you say Pizza Hut 10 times... they want a pizza.

The sugar and salt contents of McD (and many other) fast food retailers products also serve a valuable function... they oversalt the fries so you buy drinks (Anybody who has worked in a 'pub' knows that's why you often give away free peanuts). And people get the candy-rush from a McD burger... it's not so much that it tastes 'good', but that it tastes 'sweet'.

But, probably the main reason - a combination of laziness (it is easier to walk or drive to the fast-food restaurant than to make your own burger, apparently) and presence... McD is EVERYWHERE. So - you are on your way home from work, and can't be bothered to cook, and you walk past McDonalds...

and you say Pizza Hut 10 times... they want a pizza.


I sure do...mmm...doubt they're open at 6 am though.

I sure do...mmm...doubt they're open at 6 am though.

Ah...but I do believe McDonalds is...and there's one a quarter mile up the street from me....

Ah...but I do believe McDonalds is...and there's one a quarter mile up the street from me....

The thought just made my stomach churn. A hot pocket will do the trick. Why up so early?

The thought just made my stomach churn. A hot pocket will do the trick. Why up so early?

I don't have hot pockets. And I'm not up early. I'm up late.:)

I don't have hot pockets. And I'm not up early. I'm up late.:)

Same here. Not all of us keep the same hours as each other....

Who Cares?

exactly