MCD - CREATING HAVOC

According to the WSJ, MCD is pushing to sell all soft drinks, no matter the size, for $1. 

My initial reaction to the news:

(1)    MCD’s maniacal focus on TC’s is reaching a new low

(2)    It’s not good for the other industry players profitability

(3)    Most likely another sign that trends are not getting better for QSR

(4)    Whatever happened to the idea that the $1.00 menu made sense because of the add-on profits of drinks and fries?

(5)    It will make it very difficult for MCD to sell $4 blended drinks this summer

We are currently short YUM in the Hedgeye Risk management virtual portfolio.  This news puts one foot in the door to adding MCD to that list.

Howard Penney

Managing Director