McDonalds has felt the pinch of consumer choice and lackluster appreciation for the chain. Their second quarter reported sales and profits have once again shown a significant drop. Significant enough that the chain is once again going back to the board room to try to formulate a new strategy to reverse the trend.
Suggestions abound from all sorts of Capital Management firms that caution should be used with investment in the company. With stock sales falling, and the overall valuation of the stocks faltering, individuals like James Dondero have taken the steps to prevent large losses from clients’ portfolios.
Brainstorming with Mr. James Dondero have initiated many new menu offerings at the restaurants run by the company. McDonalds is even bouncing around the idea of offering an all day breakfast menu to try to increase customer traffic and boost profits. Concern expressed focuses mostly on the domestic market.
International sales do show promise and strength, although many argue that this is based on international monetary standards, and not the domestic growth and prospectus. In comparison with the domestic market, where the dollar is faltering and becoming seriously devalued, the international market has the sales and the traffic to sustain the company until it can reverse present domestic trends.
Another issue that the company and its various franchises must now address, is the hike in the minimum wage. The company overall may be able to absorb the hike, but menu prices are expected to rise in conjunction with the iincreased pay. The only sure thing is that the company must do something drastic to reverse their profit losses.