Monday, January 26, 2009

McDonald's Likes Recessions

When I was reading the site of the ever-yellow Matt Drudge, I came across a very interesting story about McDonald's and the economic downturn. It seems that people are increasingly turning to McDonald's for food during these hard times. (Image: Wikipedia) Now this story in itself is interesting enough to justify a read, but there are some broader lessons here. Let's just look at this objectively. Economy is down, budgets are tight, so let's eat fast-food more. Weird, huh?

Call me crazy, but I would venture a guess that it's more economical and healthier to make food at home and take it with you for lunch than it is to get something from McDonald's. Sure they make cheap fast food, but they also are a business with surprisingly high margins. I see the draw of the low advertised price, but we can do better ourselves.

Even if we couldn't get our homemade lunch cheaper than a $3 meal, it would be a lot healthier. I don't want to come off as too hard on McDonald's here, because, while I think they make a terrible product, they are not nearly as evil as most companies of their size. Rarely do I hear a news story bashing McDonald's for anything besides the low health standards of their foods. Meanwhile, most corporations of their size are riddled with financial mishaps or labour controversies.

McDonald's is relatively good from the perspective of business ethics and financial stability — and that's important. I won't degrade McDonald's as a business. I also won't categorically say that I will never eat McDonald's foods; sometimes it just happens, during long road trips or late nights, that McDonald's is nearby. It's convenient, it's cheap, and it's addictive.

But the level of business McDonald's is receiving during this downturn is more than just a few new casual customers dropping in. This is an increase in the occasional visitors and in the frequent visitors. Going to McDonald's as a regular source of food is terribly unhealthy -- which I'm sure everyone knows. So why are people doing it?

I believe it comes down to the psychological aspect of the low advertised prices. It's convenient and it seems cheap. However, people need to be aware that there are other options. Even if it costs you $4 or even $5 to fill a lunchbox with a homemade meal compared to $2 or $3 to get a Big Mac Meal, I'm sure your homemade meal won't include 72% of your recommended daily fat intake.