Higher MCD Prices Are Sending Diners to EAT, PNRA, DENN

A Double Quarter Pounder meal costs about $7.50 now

By Karl Utermohlen, InvestorPlace Writer Oct 20, 2014, 3:40 pm EDT October 21, 2014

McDonald’s (MCD) is losing customers to fast-casual chains due to rising prices in the burger chain’s menu.

Consumers are turning to restaurants such as Chili’s (EAT), Panera (PNRA) and Denny’s (DENN) where they can get high-quality meals for a similar price.

As McDonald’s prices continue to rise, the chain appears to be losing some of its core customers who value price over quality. However, with the Dollar Menu charging several dollars for some items, consumers have turned to fast-casual concepts.

A Double Quarter Pounder combo with fries and a drink costs about $7.50 at McDonald’s nowadays. In comparison, Chili’s is selling a variety of combo meals for $7 or $8.

McDonald’s is reporting third-quarter earnings tomorrow and analysts estimate a 1.8% fall in revenue to $7.2 billion. They also predict an 11% slide in net income to $1.36 billion.

MCD stock is up 0.4% Monday afternoon. EAT stock is up 1.27%, PNRA stock is up 2.1% and DENN stock is up 1.9%.

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