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My considered take on the McFlurry machines is that it's products are primarily a loss-leader for McDonalds. Folks are attracted by the low-priced dessert offer

My considered take on the McFlurry machines is that it's products are primarily a loss-leader for McDonalds. Folks are attracted by the low-priced dessert offerings from the McFlurry machines (which conveniently don't work), so somehow psychologically the attractor remains and is a factor in walking in decisions. Obviously these machines cannot be broken all the time everywhere in the world - but they are ! IMHO Johny Harris's take on the matter does not address the 'loss-leader' / Psychological reason that I put forward.

jldugger 5y ago
>Johny Harris's take on the matter does not address the 'loss-leader' / Psychological reason that I put forward. Well, some data would be advisable. Is it a loss leader? Is their ice cream priced lower than wendy's, burger king, in-n-out or similar? To the best of my knowledge, none of those places have this problem.
- tmellon2 5y ago
  In my observation, in international markets the price of a McDonald's soft-cone dessert is 1/6th of their primary burger ! Source (for example): https://menuprice.co/in/mcdonalds-menu https://menuprice.co/in/mcdonalds-menu . The pricing is simply unsustainable if folks walk in only to purchase the soft-cone. The clever marketing folks understand this underlying 'loss-leader' dynamic. The consumers would not tell you this explicitly - as it would appear to be 'cheap' on their part, but consider it a good-deal whenever the 'McFlurry' machines work. Further it has been shown sugar is pretty addictive.
  - foerbert 5y ago
    What does the price of a cone in relation to the price of a burger have to do with a cone being a loss leader or not? The price of a burger has absolutely nothing to do with their costs on the cone. If the cone is profitable to sell, then it's not a loss leader and they have every incentive to sell as many of them as they can.
    - tmellon2 5y ago
      The cone is not profitable at about 25 to 30 Cents US (including local taxes) in international markets - where dairy ingredients, stable electricity and store front rental in a fancy location are expensive. The burgers (about $2.50 USD) on the other hand rake in 100-200 % profits. Regular Coke sells at about $1 USD; again comparable to US market prices.
      - jldugger 5y ago
        > dairy ingredients, stable electricity and store front rental in a fancy location are expensive Two of those three are not really marginal costs. Yes, it costs electricity to make the food, but _stable_ electricity is something you already need in the biz, same as rent. If you need a generator, you already have one. Also, enlighten me: are markets where electricity grids are unstable the same ones where retail space is expensive?
- tmellon2 5y ago
  I speak primarily of international markets. For example : All of Burger King's desserts are priced 3x times that of McDonald's soft cone - which is evidently a loss-leader. Source : https://menuprice.co/in/burger-king-menu https://menuprice.co/in/burger-king-menu & https://menuprice.co/in/mcdonalds-menu https://menuprice.co/in/mcdonalds-menu
cglace 5y ago
Are you serious? Then why do franchise owners want to get them back up quickly? Wouldn’t the goal be to let it stay down? Why would I ever come for dessert but stay for the burger? I can get soft serve from QT for .49 cents. I don’t think McDonald’s is intentionally losing money on ice cream to get you to buy Big Macs.
- tmellon2 5y ago
  I can only speak for most international markets. It is a loss-leader (calculate prices v/s similar dairy) and you intentionally let the machine stay broken (if it actually is). Some minimum wage worker takes the heat from the consumer, but that's OK. If you do a 'Money-Ball' type calculation, you will find this situation is beneficial. Just Don't tell me McDonald's corporate does not know of this and somehow choose not to provide a long-term fix to the problem. The YouTube video addresses only one angle of this IMHO.
robocat 5y ago
> loss-leader The dessert is part of what you are buying. You might as well say the cheese in a burger is a loss leader…
ragazzina 5y ago
>Obviously these machines cannot be broken all the time everywhere in the world I know this is hyperbole, just wanted to add a detail. This is a US-only issue. I don't think I have ever found a broken McFlurry machine in my part of Europe - and I had a LOT of McFlurries in my teenage years. I don't think they use the same Taylor machine here.
- tmellon2 5y ago
  Parts of Europe, Australia & New Zealand are examples of well regulated markets and these issues would not crop up there; besides the engineering staff in the above mentioned countries would not participate in perpetuating this now well-known issue.

jldugger 5y ago

>Johny Harris's take on the matter does not address the 'loss-leader' / Psychological reason that I put forward. Well, some data would be advisable. Is it a loss leader? Is their ice cream priced lower than wendy's, burger king, in-n-out or similar? To the best of my knowledge, none of those places have this problem.

tmellon2 5y ago
In my observation, in international markets the price of a McDonald's soft-cone dessert is 1/6th of their primary burger ! Source (for example): https://menuprice.co/in/mcdonalds-menu https://menuprice.co/in/mcdonalds-menu . The pricing is simply unsustainable if folks walk in only to purchase the soft-cone. The clever marketing folks understand this underlying 'loss-leader' dynamic. The consumers would not tell you this explicitly - as it would appear to be 'cheap' on their part, but consider it a good-deal whenever the 'McFlurry' machines work. Further it has been shown sugar is pretty addictive.
- foerbert 5y ago
  What does the price of a cone in relation to the price of a burger have to do with a cone being a loss leader or not? The price of a burger has absolutely nothing to do with their costs on the cone. If the cone is profitable to sell, then it's not a loss leader and they have every incentive to sell as many of them as they can.
  - tmellon2 5y ago
    The cone is not profitable at about 25 to 30 Cents US (including local taxes) in international markets - where dairy ingredients, stable electricity and store front rental in a fancy location are expensive. The burgers (about $2.50 USD) on the other hand rake in 100-200 % profits. Regular Coke sells at about $1 USD; again comparable to US market prices.
    - jldugger 5y ago
      > dairy ingredients, stable electricity and store front rental in a fancy location are expensive Two of those three are not really marginal costs. Yes, it costs electricity to make the food, but _stable_ electricity is something you already need in the biz, same as rent. If you need a generator, you already have one. Also, enlighten me: are markets where electricity grids are unstable the same ones where retail space is expensive?
tmellon2 5y ago
I speak primarily of international markets. For example : All of Burger King's desserts are priced 3x times that of McDonald's soft cone - which is evidently a loss-leader. Source : https://menuprice.co/in/burger-king-menu https://menuprice.co/in/burger-king-menu & https://menuprice.co/in/mcdonalds-menu https://menuprice.co/in/mcdonalds-menu

cglace 5y ago

Are you serious? Then why do franchise owners want to get them back up quickly? Wouldn’t the goal be to let it stay down? Why would I ever come for dessert but stay for the burger? I can get soft serve from QT for .49 cents. I don’t think McDonald’s is intentionally losing money on ice cream to get you to buy Big Macs.

tmellon2 5y ago
I can only speak for most international markets. It is a loss-leader (calculate prices v/s similar dairy) and you intentionally let the machine stay broken (if it actually is). Some minimum wage worker takes the heat from the consumer, but that's OK. If you do a 'Money-Ball' type calculation, you will find this situation is beneficial. Just Don't tell me McDonald's corporate does not know of this and somehow choose not to provide a long-term fix to the problem. The YouTube video addresses only one angle of this IMHO.

robocat 5y ago

> loss-leader The dessert is part of what you are buying. You might as well say the cheese in a burger is a loss leader…

ragazzina 5y ago

>Obviously these machines cannot be broken all the time everywhere in the world I know this is hyperbole, just wanted to add a detail. This is a US-only issue. I don't think I have ever found a broken McFlurry machine in my part of Europe - and I had a LOT of McFlurries in my teenage years. I don't think they use the same Taylor machine here.

tmellon2 5y ago
Parts of Europe, Australia & New Zealand are examples of well regulated markets and these issues would not crop up there; besides the engineering staff in the above mentioned countries would not participate in perpetuating this now well-known issue.