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As Sales Rise, McDonald's Will 'Evolve' Dollar Menu

  • Ad Age , Thursday, July 24, 2008 10 AM
McDonald's, which has faced increasing pressure from its usually docile franchisees over the low margins of its dollar menu, says it is determined to tweak the offerings until they're profitable. The chain intends to continue offering inexpensive options, says Ralph Alvarez, the chain's president-COO, "but what sits on that menu will look different than now because it has to be profitable."

McDonald's has previously confirmed that it's testing double cheeseburgers for more than $1, but this represents the company's first commitment to "evolve" the menu. In addition, Alvarez says McDonald's will add smoothies, frappes, bottled beverages and energy drinks throughout 2009.

Despite higher food costs and a cost-conscious consumer, McDonald's second-quarter same-store sales rose 3.5% in the U.S. over the prior-year period. Net income was $1.2 billion, up from a $711 million loss a year ago. The company credited coffee and the Southern Style Chicken Biscuit as contributing heavily to breakfast sales, McDonald's fastest-growing daypart.

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