Ask an expert: McDonald's recent decline

MSN Money's Charley Blaine discusses the recent weakness in the stock price of the world's largest fast food restaurant.

By MSN Money Partner Dec 24, 2012 2:47PM
In 2011, McDonald's (MCD) was one of Wall Street's darlings, with the stock gaining some 30% -- well outperforming the Dow's ($INDU) 5.5% advance. So far in 2012, it's been one of the Dow's dogs, plunging year-to-date about 11% as the Dow has risen nearly 8%.

In this video, MSN Money's Charley Blaine explains what's behind McDonald's recent decline, as well as discusses other opportunities in the sector.
There has been no shortage of news about McDonald's lately. From pushing stores to remain open Christmas Day to allegations in China it was overfeeding antiviral drugs and growth hormones into the chickens it sells in its stores there. But these don't explain the stock's poor performance.

A sign outside the fast-food chain McDonaldBlaine explains that McDonald's has been hit by several factors, not the least of which are higher gas prices early in the year and consumers' concerns about going out; the weak economic situation in Europe; and increasing competition from Yum Brands' (YUM) KFC among others.

Despite all this, McDonald's retains a positive outlook, much of it stemming from the way it's conducting its operations, which have proved themselves so far, including controlling of stores, supply chain and consistency. The dividends only make it even more attractive.

And what are other promising investments in the sector? Blaine goes over several chains that still haven't taken advantage of the many opportunities, mostly internationally.

The discussion about McDonald's and the restaurant sector continues over in MSN Money's Facebook community.

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Tags: MCDYUM
130Comments
Dec 24, 2012 8:41PM
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its cheaper to eat real food look at the price 6 dollars or more for a value meal
Dec 24, 2012 4:53PM
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Why did I stop going to McDonald's? (was a patron at least once a week for several years)...I quit going because I got sick and tired of coming home to find my order was NOT what I PAID for! Either food would be missing from the bag or it would not be prepared as requested. I don't understand how it can be so difficult to understand when someone says NO pickles..and I get home to find the item OVERLOADED with them..yet the receipt CLEARLY states NO pickles. This happened at least 2 out of 2 times. It was not cost effective for me to go back (15 mile round trip), and I got NOWHERE when calling to speak to a manager about the situation. If they want to keep customers satisfied and coming back, then they ought to at least hire employees who know how to read an order ticket! I even tried staying away for over a year and then tried again...and would you believe, NOTHING changed! So needless to say, I am DONE with them...FOR GOOD!
Dec 25, 2012 10:19PM
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Bad customer experiences will eventually catch up with all stores as I too avoid Mickey D'd like the plague after getting shorted, wrong orders and counter people that wait on you with a dumbfounded look. I swear Bevis and Butthead must be training their order takers.
Dec 26, 2012 12:33AM
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I am pretty disgusted with McDonalds pushing their franchises to stay open on Christmas for an average of a lousy $5500 per store.  They make so much money that they could have paid for the wall street bailout with just the profits from 2007 and still had 25 million dollars left over.  Stop the madness.  It is really tough to be a fast food worker.  Most of them already miss out on all the other holidays so let them have Christmas with their family.  Taking people away from their kids on Christmas is a really grinchy thing to do.  Shame on you MdDonalds....shame .. on .. you.
Dec 24, 2012 4:45PM
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whats wrong at McDonalds...Well to start with..they used to have the best fries in the world but i think they changed the oil used to fry them in and now they taste like crap... i myself stopped going to McDonalds because of this...
Dec 25, 2012 11:14PM
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Why is McDonald's in a decline?

1.  poor service: I agree with the other posts that they don't pay attention. I ordered extra pickles and sauce on my McRib (yeah...I know it's bad, but I was craving it) and there was no extra sauce (dry as a bone) and the same two measily pickles it usually comes with. No extra pickles and no sauce and I was charged for it?! This happened two times at two different locations. I was already at home when I saw this and it was too much of a hassle to go back.

2.  The bathrooms are absolutely filthy and disgusting. I walked in and walked right out and vowed to never use a McDonald's restroom again. It's not just at the ones that are near the rest stops that are dirty, but even the ones in the city. How dirty their bathrooms are ... is a reflection of how dirty their kitchen must be. Ewwhh! Although, if you compare it to the bathrooms in some foreign countries...I would be happy any day to see a McDonald's bathroom.

3.  They are being cheap on the sauces.  If I order a 20 piece nugget meal, I think I should NOT be charged for asking one extra BBQ sauce when they only gave me one.  One sauce is for the small order. C'mon now.

To also be fair: The positives - They have a play area for kids, the outside building looks new and clean, & you can always find one down the street.

McDonald's, I hope you read these comments to better your company.

Dec 26, 2012 12:35AM
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I have stopped going there because of the cost and also not feeling well after eating my $6- dollar

VALUE MEAL.  Just because it is fast food it does not have to be bad food.

Dec 25, 2012 10:57PM
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 It is so sad, what is happening in this country. no one cares about anything! poor service everywhere !

poor service at mcd. you cannot get what you order at the drive thru. parts of order wrong, silverware left out, ect. cold coffee! no need to talk to mgr. they are trying to work with mentally doped up people! i have to pull up from the window and check order everytime. at least half of time i have to go in and get what is left out. i know i am the stupid one for shopping at mcd.

Dec 26, 2012 2:57AM
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Crappy food; crappy service; Stupid people; Dirty bathrooms    BLAH!!!!!!
Dec 26, 2012 3:12AM
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The reason we quit going to McD is because the prices are way to high & out of line.

We go to Steak & Shake $3.99 for single steakburger & fries or $4.99 for double steakburger and fries.

If you get there at special times their very good shakes are half price or 2 for 1.

 

THATS WHY MCDONALDS  READ THE ABOVE.

Dec 26, 2012 12:30AM
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people gradually get sick of mediocrity. I will not eat at MDs unles A. I am starving, and B. there is absolutely no other options...
Dec 25, 2012 10:57PM
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0I think a lot of people are concerned about how they treat their employees, not paying a "loving" wage and increasingly how they are going to get out of paying for their employees healthcare (most don't pay for healthcare for their employees, anyways).  I can get a crummy fattening meal at any of their fast food neighbors, that may make an attempt to pay better wages.  Start cooking at home.  Put these uncaring fools out of business, we are too fat anyways!
Dec 25, 2012 11:16PM
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when I stop at McDonalds and the drive through is full, I leave and go to a competitor.
Dec 26, 2012 7:33AM
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  You people are all illiterate hypocryts who can't spell.! You know what they sell and what it costs before you go there. It is easy to bash something on this public forum. Look at it like listening to the radio, if you don't like it then don't listen. You go to a drive thru restaurant expecting a gourmet meal in 20 seconds and when that doesn't happen you complain here! Yes you can prepare your burger and fries at home yourself, but.....You will spend for hamburg and fries, use energy to cook, and then clean the dishes when done! After paying for food, energy, and labor to prepare and clean-up it will cost more!

  I have been going to Macdonalds for over 40 years and I am not an unhealthy slob as many of you suggest I should be from eating their food. The fact is that Americans are lazy, greedy, and arrogant! You want more than you paid for at a cost that only comes from cheap labor and then you want to complain for your own laziness.

  When you go for fast food, you get what you went for ...fast cheaply prepared food.  Quit your bellyachin!!!!

Dec 26, 2012 8:00AM
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LOL @ all these whiners.  1.  YOU never leave the window without checking your order FIRST!  2.  It is the OCCASIONAL meal...NOT the everyday faire.  3.  MOST people refuse to work there as it is a demeaning job, so I am thankful to see anyone handling the situation from cooking to saying taking my money and handing out my order.  4.  Managers are indeed lazy until you realize they are dealing with 93948757574636262 whiners such as what we are reading here, minus a few... who do understand what fast food is all about.

It is a simple solution.  McDonald's works because people make it work..from the happy meal kiddies to the older generation and even the whiners.  Happy Holidays and best wishes for a new attitude :)

Dec 26, 2012 11:11AM
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I LOVE Mcdonalds Espresso- Totally addicted. The food is good, I like the salads, always have. My concern is that the advertising is directed toward Mexicans and Blacks. They seem to have decided that thats the marke they ae going to target. That offends me. Many American companies are doing the same- have you seen all of the different ads for Pillsbury? Out of 5 commercials, they show 1 Caucasian family- So, advertisers in America, big companies are pandering to ethnic groups and excluding Caucasians. That bothers me.
Dec 26, 2012 12:25AM
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What's wrong with Mickey D's? Where should I start? How about selling and serving $hit to the world? We just go down hill from there.

Dec 26, 2012 12:10AM
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I don't eat fast food cuz they all taste the same. The food is not healthy. It's expensive. I can make a better cheeseburger at home that's cheaper, better ingredients. Took my grandghtr to one for an ice cream and play land. I was disgusted with the dirty, greasy floor that was thru the whole building. "play" land was very old, parts missing and I wondered what sort of germ cesspool she was crawling around in. thankfully she was not that interested, and we finished quickly and left. that was 3 months ago.
Dec 26, 2012 11:12AM
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Like all fast food restaurants, it is easy, quick and a decent price for the convenience.

I'm amazed at all these self righteous people bashing an icon....a place that almost everyone has eaten at. Now as far as taste, quality and selection, I prefer Wendy's....but I wish Wendys would keep their fish sandwich on their menu all year. 

 

 

Dec 25, 2012 11:12PM
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McDonalds sells unhealthy food. Someday, people will gewt it. I haven't been to McDonalds for years - until they clean up their food, I wouldn't bother.
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