McDonald's Bear's Rebuttal
by Rick Munarriz ([email protected])

What does McDonald's cannibalization and a billy goat eating garbage have in common? Nothing. Nothing at all. I live in as residential of a district as one can get, but I have a McDonald's just three blocks away. With international concerns forcing the company to open many of its 2,100 new restaurants stateside this year, all I can offer is that my neighbor's house just went on the market. I'll call zoning.

Let's call this saturation. Saturation of saturated fat. I buy many of the arguments Chris has eloquently made, but I can't share in his quantitative zeal for the future prospects of a Mickey D's in qualitative shambles. He is excited over the announced innovations, but the same thing happened almost three years ago. The result (cryptic link-based comedy alert)? The Arch Deluxe and new cooking techniques. Edsel? Oven? Oh, Ed Sullivan! Indeed, and this is one really big "shoe" that even Ronald McDonald can't fill.

Chris is quick with great anecdotes of McDonald's success overseas. When I spin the globe here is what I see...

Indonesia. The company is closing 20% of its McDonald's eateries here due to sluggish sales.

Brunei. Sales here have dropped in half now that the country has forced the Big Mac off the menu after finding that the meat-based sandwiches are not in line with Muslim beliefs.

Asia. While revenues were up 10% in the region last quarter in local currency terms, the strong dollar translated that into a 10% decline in Asian sales.

Where in the World is Karma? San Diego? I don't know. All I know is that overseas there will never be universal stability, and stateside, well, if you can't pack a small bean bag animal toy into a Happy Meal with disposable food contents the interest lingers.

All this and my strongest point comes from the most unlikely of sources, Chris himself. Just last week McDonald's reported quarterly earnings. Sales were up 12%. Earnings were up just 7%. Falling margins. The company also expects that the comparisons will get even tougher for the rest of the year.

Chris wrote, "the fact that EPS has grown more quickly than revenues is a sign of a well-managed corporation." McDonald's? McNot!

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