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Options
Krispy Kreme and McDonalds
Trying to think how to play this in my portfolio. Go long DNUT and MCD or just load up on semaglutide and sweat pants manufacturers?
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Comments
My wife loves Crispy Creme. Go long for the DNUT and MCD.
Just remember the "Hot Now" will eventually be Cool Later.
I'd just go with NVO (Ozempic stock).
Don't forget Eli Lilly (LLY)…it's been a big winner in my portfolio the last few years!
My wife just started taking Zepbound after months of back and forth with insurance.
There's a shortage on Ozempic, so Zepbound sales should really go up…I just hope my wife doesn't have a shortage.
Also, I'd stick with Chipotle (CMG)…with a 50:1 stock split and expansion overseas, I think there's a lot more room for growth.
The weight loss drugs are going to hit MCD, etc. My wife says that she just doesn't desire fast food anymore.
I can't believe adults still eat McDonalds. Just gross. KK donuts are good, but nobody should eat more than one at a time.
If you are a McD and/or KK regular you are your own worst enemy.
This is accurate. When you see people knocking down "Krispy Macs" and "Filet o Kremes" it is truly self-harm. Next step on the downward spiral would be Nothing Bundt Cakes and Dominoes converging…
Yep. This is probably 90% of America's obesity problem.
In some places, fast food is still an affordable option. And for parents who rarely get out of their car, driving their kids from one practice or club meeting to the next, it's the convenience that becomes the decider.
California is getting ready to "cure" a lot of people from their fast food habit. Starting Monday, fast food workers will be earning $20/hr. Mass lay-offs are expected, SBA loan defaults will tick up, and what's left of the middle class in CA will be bearing the burden of unemployment claims.
I had to look it up but the McD's near me charges $10 for a big mac meal. That will likely go up to $15….$60 for a family of 4? For that nonsense? And that basically means restaurants who serve quality food will have to raise their prices too. Eating out is really becoming a non-option for many. Very little of it is without additives and preservatives anyway.
The issue is more about employment.
Cover your bets and invest in all four!
That escalated quickly. And she’s right.
and Go Dawgs
That is the most disgustingly perfect merger of all time. Lol.
It is amazing what people will put in their mouths….
they already make close to 17/hour on average which is below the poverty line in California. I doubt this affects profit margins that much
That's a 25% increase in minimum wage ($16/hr now) in the salary line on a P&L, which is not a non-factor. If it wasn't a significant increase, Greg Flynn wouldn't have spent money and political capital on getting an exemption from the governor for his Panera Bread locations in the state before he got exposed in the media and submitted reluctantly.
So what happens to the skilled workers who were making $20/hr? They are going to demand $30/hr (they aren't going to accept minimum wage)….then the managers making $30/hr (or around $60K) are going to demand more….and so on. It's California's own fault it's so expensive to live there. Taxes, taxes, and more taxes. This massive increase in minimum wage is going cause problems. BIG problems down the road.
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Yep, get ready for mass layoffs. Companies will simply reduce their workforce. McDonalds will automate their whole store. If a company can afford to pay 3 workers $10/hour, when the rate goes to $15/hour, one job will be eliminated. I have a lot of experience managing P&Ls. The first thing to go to save money is always people. Hooray for Welchian Capitalism!
You have to look at the recent increases to understand. Just 4 years ago, the CA minimum wage was $13. The following year it bumped up to $14. In 2022 it rose to $15, then last year to $16, and now $20.
And it's not just a one-off pay raise. A fast food council will be able to increase the minimum wage by up to 3.5% a year, depending on inflation.
"Diners have already faced dramatic price increases during the pandemic. Restaurants typically raise prices by around 2% a year, but some put prices up by more than 10% in 2022 amid soaring labor and commodity inflation."
This has very much impacted profit margins. For multiple franchise owners, they will close locations and focus on only those who make them money. Keeping in mind that a LOT of restaurant owners did not survive the brilliant shut-down laws from a few years ago. Personally, I only go to restaurants in my area that are family-owned because I know them, they are part of the community. Corporate chains are a definite no for me.
More automation instead of people. There are already some fast food locations with 0 counter people. They simply operate on mobile-only ordering and then pick-up or uber eats, etc delivery since they don't have to pay for that.
There will be more emphasis on what they will call "value meals" or packages which of course means no nutritional value for the customers.
The chains that were already paying at this amount, like In-n-Out will be fine but those are mostly in bigger cities. More suburban areas will struggle. And those folks are already near poverty as it is.
California is expensive because they don’t build enough housing
minimum wage in Texas is $7.25 while the cost for Big Mac is a dollar more on average compared to Washington which has a minimum wage of over $16. The link between minimum wage and fast food cost just isn’t that strong. Automation is good. It increases worker productivity