Mc Inflation and or Mc Ripoff?

[elhombresinnombre]

Labor cost in fast food restaurants is typically about 20% of sales revenue in the US. Must be less in Argentina since I doubt the fast food workers are paid the equivalent of USD 8 an hour. The explanation for the high prices probably lies elsewhere -- rampant inflation? I'm staggered to hear of prices in the 30-40 peso range. When I was last in Argentina in 2006, a meal at McDs or BK was only about 12 pesos (USD 4) -- roughly half the cost of a meal in the US. Now it's more expensive than the US.

Incidentally, I saw the same phenomenon in Panama, where McD and BK prices were roughly comparable to their prices in the US -- but their workers were paid about USD 1 an hour.

This is all true, but it doesn't explain the Burgenomics factor - why a Big Mac can be a useful international comparitor. The Economist might just as well have chosen Coca Cola or Pepsi - though they would have acted as a comparison for different factors, I believe. The point being that the production cost of Coke and Big Macs is almost irrelevant: they are not sold on an old-fashioned 'cost plus' basis but priced to suit the target market. I have heard it said that Coke in Argentina is the most expensive in the world while in Bolivia I have seen small, individual bottles sold for tiny amounts of money. It's not about cost: it's about knowing your target market.

 

[starlucia]

Funny when McDonalds here is more expensive than the golden arches in the US....

As it should be. It's sick and sad that in America, a double cheeseburger and trans-fatty pie is both cheaper and easier to find than a bag of fresh fruit or vegetables. In poor urban areas, the nearest fresh produce or lean protein might be a mile away, but there is fast food on every corner, and it's cheap as hell.

Meanwhile, one of the things I really admire about Argentina is how accessible "real food" is to the working poor. You can feed a family of four for less than ten pesos by purchasing unprocessed staples, while McDonalds is far too expensive to be eaten on a daily basis. I was recently in a part of Quilmes so poor that they used horses and buggies, but I still saw verdulerias and granjas everywhere (and not a fast food joint in sight.) Ours is the system that is backwards.

 

[ameliamcg]

Yesterday,on a trip to Easy-Jumbo in Palermo, I passed the McDonalds in the Mall. As a practising Vegetarian, I never eat in these restaurants. I guess I was curious to see their prices. $39.99, was the price of a "menu". Now, as a vegetarian, I'm worried. Surely, with prices, like these, many people will give up McD's and meat. Thus, produce prices will rise.

Why in God's name wold someone give up meat because McD's prices are too high?!?! 3 words - ojo de bife
I'm not vegetarian, I certainly wouldn't eat in those 'restaurants' either. Starlucia is right on the money. There is good real food out there for cheaper than the processed garbage.

 

[ctru]

I think even with the benefits being paid as David mentioned the cost of this stuff seems high. Labor costs are still a fraction of those in the U.S. It seems to me somebody is just making more profit per burger. Maybe the government should look into these burger barons and make them cut their prices?

Arcos Dorados Holdings is the baron in this case. Since 2007 they have had the exclusive right to own, operate and grant franchises of McDonald’s restaurants in 19 countries and territories in Latin America and the Caribbean, including Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curaçao, Ecuador, French Guiana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, Uruguay, the U.S. Virgin Islands of St. Croix and St. Thomas, and Venezuela. They are based in Buenos Aires.

Today they operate 1755 outlets, making them the world’s largest McDonald’s franchisee. Over the last four years they have quadrupled their net income.

With the mentioned prices it all makes sense...

 

[Matt84]

Arcos Dorados Holdings is the baron in this case. Since 2007 they have had the exclusive right to own, operate and grant franchises of McDonald’s restaurants in 19 countries and territories in Latin America and the Caribbean, including Argentina, Aruba, Brazil, Chile, Colombia, Costa Rica, Curaçao, Ecuador, French Guiana, Guadeloupe, Martinique, Mexico, Panama, Peru, Puerto Rico, Uruguay, the U.S. Virgin Islands of St. Croix and St. Thomas, and Venezuela. They are based in Buenos Aires.

Today they operate 1755 outlets, making them the world’s largest McDonald’s franchisee. Over the last four years they have quadrupled their net income.

With the mentioned prices it all makes sense...

Really? that's news!

on another topic, http://www.nationmaster.com/graph/foo_mcd_res-food-mcdonalds-restaurants

# 1 United States: 12,804 McDonald's restaurants
# 2 Japan: 3,598 McDonald's restaurants
# 3 Canada: 1,154 McDonald's restaurants
# 4 United Kingdom: 1,115 McDonald's restaurants
# 5 Germany: 1,091 McDonald's restaurants
# 6 France: 857 McDonald's restaurants
# 7 Australia: 701 McDonald's restaurants
# 8 Taiwan: 338 McDonald's restaurants
# 9 China: 326 McDonald's restaurants
# 10 Italy: 290 McDonald's restaurants
# 11 Spain: 276 McDonald's restaurants
# 12 Korea, South: 243 McDonald's restaurants
# 13 Philippines: 235 McDonald's restaurants

and here's the wikipedia entry, and the competition

 

[bigbadwolf]

This is all true, but it doesn't explain the Burgenomics factor - why a Big Mac can be a useful international comparitor. The Economist might just as well have chosen Coca Cola or Pepsi - though they would have acted as a comparison for different factors, I believe. The point being that the production cost of Coke and Big Macs is almost irrelevant: they are not sold on an old-fashioned 'cost plus' basis but priced to suit the target market.

Can't quibble with this. In Norway, a meal at McDs/BK is about $22-$25. And a bottle of coke about $4 ($1.25-$1.50 in the USA). And these prices give some rough idea of how much more expensive Norway is in general. Incidentally, Norwegians can't afford these prices either and tend not to eat out. But as you indicate, the McD index doesn't capture the cost of living in countries like Argentina and Panama.