3 ms·

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://menupri

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?

3 ms·

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://menupri

by tmellon2 5y ago

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?