MCD Europe - One Price No Longer Fits All

Despite MCD's Europe posting another month of strong same-store sales in May (+9.6%), an article in the Financial Times points to difficult times ahead, stating the company is adjusting its one price fits all
pricing structure in an effort to offset rising commodity costs. According to the article, MCD has hired Revenue Management Solutions, an international consultancy group, to survey how price-sensitive its customers are by specific region so that it can more effectively raise prices without facing customer resistance.

Steve Easterbrook, chief executive of McDonald's U.K. business is cited, We do have to move prices up, we can't just absorb [food] price increases. Our food bill has gone up by 5%-6%. MCD's franchisees have had pricing flexibility for a couple of years now, but this is the first time its company-owned restaurants will not have a uniform pricing structure.

With the company forecasting Europe chicken prices to be up 6%-8%, cheese up 20%-25% and beef up 3%-4%, it is not surprising that MCD will have to raise prices but this change in strategy and the implication that consumers can no longer tolerate a blanket menu price increase is another sign that the consumer environment is becoming more challenging in Europe (following the Eurozone Retail Sales report, which showed a 2.9% decline in European retail sales in April and the Experian Group Ltd's statistic which showed that May shopping in Britain had fallen 1.5% from the prior year and 3.4% from April).

Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more

6 Charts: The French Election, Nasdaq All-Time Highs & An Earnings Scorecard

We've been telling investors for some time that global growth is picking up, get long stocks.

read more

Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more

Europe's Battles Against Apple, Google, Innovation & Jobs

"“I am very concerned the E.U. maintains a battle against the American giants while doing everything possible to sustain so-called national champions," writes economist Daniel Lacalle. "Attacking innovation doesn’t create jobs.”

read more

An Open Letter to Pandora Management...

"Please stop leaking information to the press," writes Hedgeye Internet & Media analyst Hesham Shaaban. "You are getting in your own way, and blowing up your shareholders in the process."

read more