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McDonald's pushing for $1 soft drinks
March 17, 2010
Various McDonald's local markets have found success in recent years in offering sweet tea or soft drinks and sometimes even coffee for $1, no matter the size. The price point has been so successful that the company and its soft drink vendor Coca-Cola are pushing all franchisees to offer any-sized soft drinks for $1 for 150 days starting after Memorial Day, according to Nasdaq.com.
From the story:
McDonald's spokeswoman Danya Proud declined comment on any conversations between the company and its restaurant operators. She said more than 90% of U.S. restaurants sold drinks for $1 last summer, which "should give you an indication of its success for our business." ...The $1 drink prices are discounts from suggested prices of $1.39 for a large soda. Some experts estimate profit margins run about 90% on sodas at restaurants, leaving some room to maneuver on price. Still, franchisees worry that discounting drinks, sales of which typically compensate for discounts on other products, could hurt the bottom line, especially if customers buy other items off its Dollar Menu."We can use the sales, but these are very costly sales to get," said one McDonald's franchisee.
McDonald's, which will launch frappes and smoothies this summer, isn't the only quick-service brand fighting for a piece of the beverage market. Sonic recently announced at the Bank of America Merrill Lynch 2010 Consumer Conference that it is updating its soft-drink equipment to increase its flavor options. Burger King, which recently announced its switch to Seattle's Best Coffee, also has plans for iced coffees and other specialty drinks.
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