McDonald's to charge more in poorer suburbs (2 Viewers)

[Will Shakespear]

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.
Corporate documents obtained by The Courier-Mail show McDonald's Australia has identified an "opportunity to introduce more aggressive price increases" in 73 Queensland outlets.
Some of the stores include Logan Central, Loganholme, Arana Hills, Gympie, Ipswich City, Labrador, Morayfield and Inala Plaza.
McDonald's, which yesterday confirmed the pricing strategy, says the price "refinement takes into consideration individual factors that relate to each store ... ".
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.
The document says the system's objective is for individual stores "to maximise the potential for a price rise" while minimising the risk consumers will go elsewhere or choose a cheaper meal. The biggest price rise will be for children's Happy Meals, which will increase by 16.5 per cent from $4.25 to $4.95, at all locations.
Other items will rise in two stages by between 1.8 per cent and 3.3 per cent, depending on the location of the restaurant.
The first stage has already been implemented, while the second stage will occur in May.
McDonald's corporate communications manager Bronwyn Stubbs said the company developed prices according to "established research techniques" and these were recommended for company-owned restaurants. The most recent "refinement", which considered price factors relating to each store, was to align with the company's "global practice".
Choice spokesman Christopher Zinn said he was surprised McDonald's would raise prices during tough times.
Mr Zinn said families looking for cheap meals should consider alternatives to fast food.

 

[greekgun]

Well thats business i guess: Maccas can do wat they want and the customers can decide whetehr to buy from maccas or not to buy from them.

But i thought that maccas prices were all standard?

 

[spence]

Well thats business i guess: Maccas can do wat they want and the customers can decide whetehr to buy from maccas or not to buy from them.

But i thought that maccas prices were all standard?

Nah my store tends to be more expensive than most, probably cause we're so busy that we can afford to lose a few customers

 

[Will Shakespear]

does anyone remember last year there was a government report on obesity

and it showed how all the same poor suburbs were by far the fattest...

 

[greekgun]

Then i guess maccas are the good guys in this case.

 

[SylviaB]

Then i guess maccas are the good guys in this case.

nah, it's just a by-product.

They're definitely not doing it in order to quell obesity.

 

[greekgun]

nah, it's just a by-product.

They're definitely not doing it in order to quell obesity.

lol im sure there doing it for themselves, but at the same time it will hopefullt turn a few fatties of maccas.

 

[Nebuchanezzar]

$8.45 for a crispy chicken and bacon burger

IS THIS NORMAL???!?!?!?

In any case it was far too expensive

I'll go to Krispy Kreme and KFC instead

and pack some weight onto my 31kg body

 

[Will Shakespear]

lol im sure there doing it for themselves, but at the same time it will hopefullt turn a few fatties of maccas.

nah, they'll just get poorer

 

[Graney]

Seems like a fairly reasonable business move. Demand is too intense in the poorer areas (but not sufficient for store expansion/second store), so prices are raised in order to moderate demand. The high demand shows prices were set too low previously.

 

[love.is.around]

It because the people in the poorer suburbs have a high consumer surplus.

 

[Graney]

Woolworths has a much better range of products, and much fresher produce, in more affluent areas.

 

[banco55]

Woolworths has a much better range of products, and much fresher produce, in more affluent areas.

Not surprising as you'll generally find people in the yuppy areas bugying stuff like exotic Asian fruits etc.

 

[Nebuchanezzar]

Seems like a fairly reasonable business move. Demand is too intense in the poorer areas (but not sufficient for store expansion/second store), so prices are raised in order to moderate demand. The high demand shows prices were set too low previously.

how is demand too intense exactly?

 

[Graney]

how is demand too intense exactly?

This is evidently the case, as they believe they will be able to maintain constant sales, despite a rise of prices.

Raising prices to moderate demand is the right thing to do, for any business that is not prepared to invest in expansion.

 

[Nebuchanezzar]

If they will be maintaining sales, I'm confused as to how demand will be moderated. You seem to be saying that raising the prices will drive up profits and keep sales at the same rate.

But this isn't the main point. I don't think demand for McDonalds is too intense in the Western Suburbs - it's pretty much the same as everywhere else from a consumer's perspective (my perspective). The only reason to raise them isn't to moderate demand, it's to drive up profits, and they're driving up profits by picking on the poor, fat people.

Not that I really care all that much, since it's a few bucks per week or whatever.

 

[Iron]

How unfortunate. Those poor fat people are hooked I tell you. They couldnt quit for all the tea in China

 

[Nebuchanezzar]

texas tea...sweetener!

 

[Graney]

picking on the poor, fat people.

If only the government would allow the formation of a competing company to challenge mcdonalds tyrannical monopoly on the provision of food in Australia.

 

[agirlinatutu]

Great now we have to explain why the prices of everything they brought 'last week' have gone up. Just like with the last price rise.