Why bagels are back at some McDonald’s restaurants | Axios
McDonald’s has reintroduced its beloved breakfast bagels at its California locations after a four-year absence, citing a strategic move to counter the impact of a recent wage hike for fast-food workers in the state. With revenues reaching $6.4 billion in the fourth quarter of 2023, McDonald’s aims to bolster sales and profits amidst California’s new $20 per hour minimum wage law, effective April 1.
Acknowledging the challenges posed by the wage increase, McDonald’s embarked on a collaborative effort involving staff and franchises to devise innovative solutions, drawing insights from jurisdictions worldwide that have implemented similar wage hikes. The revival of bagels represents one facet of their multifaceted plan, which seeks to pilot short- and long-term strategies tailored specifically for the California market.
According to Bloomberg, franchisee groups estimate potential losses of up to $250,000 per location due to the mandatory pay raise, prompting McDonald’s to allocate $15 million for local advertising—an unusual move for the global chain—to promote products within the state. McDonald’s CFO, Ian Borden, anticipates wage inflation in the mid-to higher single-digit range, partly attributable to the challenges posed by California’s wage legislation.
The return of McDonald’s breakfast bagels not only signals a tactical response to economic shifts but also highlights the adaptability of multinational corporations in navigating regional challenges. Beyond California, the company has introduced the bagels as a regional offering in select markets, including Houston, St. Louis, and Chicago, suggesting a broader strategy to optimize menu offerings based on regional preferences and economic conditions……….
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Rising Dough
How do shifts in minimum wage laws, such as California’s recent increase to $20 per hour, influence the strategic decisions of multinational corporations like McDonald’s, particularly regarding marketing, menu offerings, and regional expansion?
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The shifting of minimum wage laws in California leads to companies adapting in order to not take a large hit for their profit because of the changes, with McDonalds being able to shift their decisions. The changes that McDonalds is making with their menu shows a strategy to have people go to their chains more because of the new food that they will have, this increase will be able to combat the higher expenses by having them make a higher profit off of the diverse foods. The marketing and regional expansion that they have being done will be impacted by the wage laws changing by having them rethink how they have to manage their finances because of the large changes that have happened.
When minimum wage laws change, it affects companies like McDonald’s. They may adjust prices, change menus, and focus on expanding in regions with lower costs. It’s all about adapting to the new rules!
Changes in minimum wage laws, such as California’s recent increase to $20 per hour, can cause multinational corporations like McDonald’s to reevaluate their business strategies. In response, they may alter their marketing tactics to highlight the value of their products, simplify their menu offerings to reduce costs, and carefully expand their operations in areas where labor regulations are more favorable.
Due to the minimum wage increasing to $20 an hour McDonald’s would have to hire less workers and lay off more workers because it wouldn’t be in their best interest to spend a lot of money on their workers so instead they would increase their marketing as well as increase their menu options to attract more customers to make up for the increase of the minimum wage.
Due to the minimum wage increasing to $20 an hour McDonald’s would have to hire less workers and lay off more workers because it wouldn’t be in their best interest to spend a lot of money on their workers so instead they would increase their marketing as well as increase their menu options to attract more customers to make up for the increase of the minimum wage.