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Old 05-12-2019, 06:41 AM
 
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Quote:
Originally Posted by GoodHombre View Post
I'm not exactly sure whether Chick fil A/McDonald's charge exactly the same price in the high cost of living areas like Manhattan or SoCal, but at least they seem to charge similar prices?

Does that mean their profits in the high cost of living areas lower?

When I had an office in San Francisco the McDonald's next to me had much higher prices than the ones in Arizona I was used to. However there was a Little Caesars that sold $5 pizza near my house in the Bay Area and I have no idea how they survived with those prices.
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Old 05-12-2019, 06:43 AM
 
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Quote:
Originally Posted by Oklazona Bound View Post
When I had an office in San Francisco the McDonald's next to me had much higher prices than the ones in Arizona I was used to. However there was a Little Caesars that sold $5 pizza near my house in the Bay Area and I have no idea how they survived with those prices.
as you see with mcdonalds company owned stores can have different prices then franchised stores and franchised stores need to vary from each other
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Old 05-12-2019, 06:44 AM
 
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Originally Posted by tijlover View Post
I worked at a Long Term Care/Rehab facility and our facility was the biggest money maker of the other 9 facilities in Las Vegas. Our facility helped to subsidize the other facilities that weren't making as much money or were money losers.

Isn't that a similar system to fast food chains?

I doubt that with McDonald's since most are local or regional franchises.
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Old 05-12-2019, 07:02 AM
 
Location: Thailand
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It gets more complex abroad because it's also more related to supply chain issues.
- In Guadalajara, Mexico our usual order at McDonalds is about $6 (total for two people)
- In Bangkok, Thailand the exact same meal at McDonalds costs about $10

Obviously they are both relatively low cost of living places and it's possible to eat for cheaper, especially in Thailand where we can both eat a good lunch for $3. I assume the difference is that beef is fairly common and even an major export product in Mexico, whereas beef isn't nearly as common on menus in Thailand and definitely not a local commodity like chicken/pork/shrimp. Cheese is also probably a factor. There is even a Taco Bell in Bangkok with no beef or beans on the menu since it's just not possible for the margins they need.

Last edited by lieqiang; 05-12-2019 at 07:16 AM..
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Old 05-12-2019, 07:40 AM
 
10,995 posts, read 7,467,251 times
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Quote:
Originally Posted by GoodHombre View Post
I'm not exactly sure whether Chick fil A/McDonald's charge exactly the same price in the high cost of living areas like Manhattan or SoCal, but at least they seem to charge similar prices?

Does that mean their profits in the high cost of living areas lower?
Their prices are often higher there. A long time ago in Atlantic City their prices for a McD on the boardwalk was 20% higher than elsewhere.

But in expensive areas like Manhattan they can also make the money by selling more.

I see that McD has raised prices on many things. Now a McDouble that was on the dollar menu many years is $1.69 to $1.89 in non expensive areas, this while many food prices such as meats have come down quite a bit. I think McD is raising prices while they wait for $15 an hour to be implemented in more places.
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Old 05-12-2019, 07:45 AM
 
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It's a volume model. Ever been to the McDonald's in Times Square?
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Old 05-12-2019, 07:46 AM
 
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yep , its huge
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Old 05-12-2019, 01:58 PM
 
1,545 posts, read 516,774 times
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Quote:
Originally Posted by lieqiang View Post
It gets more complex abroad because it's also more related to supply chain issues.
- In Guadalajara, Mexico our usual order at McDonalds is about $6 (total for two people)
- In Bangkok, Thailand the exact same meal at McDonalds costs about $10
Have you ever read about the Big Mac Index? It's an indication of the purchasing power of various currencies, calculated every year by comparing the price of a Big Mac in that country (converted to $US at current exchange rates) to an average price for a Big Mac in the US. Typically, the Japanese yen and some of the Scandinavian currencies have the least buying power.
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Old 05-12-2019, 03:34 PM
 
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In many cases they can make it up on volume. The hourly wage + material costs are relatively low for fast food even in high COL markets. As long as they have predictable demand curves/times they can staff accordingly and be highly profitable due to scale.

My BIL is a district manager for Taco Bell in a relatively high COL market and he’s shared his P&L with me. Breakfast is terrible by anything from lunch to the midnight drunk munchies crowd and they are making bank.
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Old 05-13-2019, 05:23 AM
 
Location: World
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Fast Food places in Student areas or in town-center with pedestrian traffic do advertise lot of Discount offers to attract customers. Those places are generally devoid of car parking.


Fast Food places with more space for parking, closer to Residential areas will not offer Discount combos.
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