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May 12, 2008

McDonald's is positioned perfectly

Analysis of: McDonald's U.S. Sales Rebound | online.wsj.com
This analysis is solely the work of the author. It has not been edited or endorsed by GLG.
Analysis By:
Rick Kowalski 
Chief Operating Officer, It's A Grind Coffee Franchise LLC
Implications: - The economy is working in favor of McDonalds. - Recent menu additions (coffee) are adding to average check.

Analysis: McDonald's is positioned perfectly in this weak economy. Their price points appeal to customers who are reeling from high gas prices and other rising costs. 

McDonald's will also be under margin pressure from rising wheat costs and other commodities but their value positioning will help them to capture the "trade-down" consumers thus bolstering average unit volumes. Their next strategy is to move away from the plastic interiors and renovate with more inviting decor packages to further welcome the fast casual buyer.


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