McDonald’s (MCD) is taking a risk, but it may be a clever one.
The world’s largest fast food chain will absorb most of the rising prices of food commodities to keep prices which customers pay low. That means the $1 menu items will not go to $1.50.
According to Reuters, MCD Chief Executive Jim Skinner said "This is not the time to be passing that on to consumers. They have long memories."
The move could push down margins in during the next year, but it should cause same-store sales to outpace virtually all MCD competitors.
Douglas A. McIntyre