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Dollar-menu prices to rise

November 26, 2008|Bloomberg News

McDonald's Corp. said Tuesday that it would increase the price of its $1 double cheeseburger to $1.19 in December to cover rising costs, ending the sandwich's run as the top-selling item on the 6-year-old dollar menu.

The world's biggest restaurant company will also replace the double cheeseburger with the McDouble. The new sandwich consists of two beef patties and a single slice of cheese, or one slice less than the double, the company said.

Restaurant operators spend about 6 cents on a slice of cheese, an expense that emerged as the focus of franchisees' pressure on McDonald's to raise dollar-menu prices for the first time.

The dollar menu, which comprises eight items that generate about 14% of McDonald's sales, helped third-quarter profit exceed analysts' estimates.

U.S. franchisees endorsed the dollar menu changes this month, setting the stage for restaurants to change menu boards by Dec. 1, the company said. McDonald's will start national advertising of the dollar menu Jan. 5.

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