tough year ahead for mcdonalds just ain’t so

THIS IS NOT WHAT I INTEND my “Strunkandwhiten It!” category to be about, but it does qualify as a misuse of the language—although in this case, it may be intentional camouflage. I am often surprised by the way large, HUGELY successful corporations are treated and described in the financial sections of newspapers.

Headlines and leads would have the reader believe that many companies are in dire straits when the truth is the opposite. Here are the headlines and leads to an article in todays’ SEATTLE TIMES (July 23, 2013):

McDonald’s earnings fall short


Higher costs, less crew
efficiency with new items

Does not sound good. In fact, it sounds rather dire. Well, read on and one finds that their second quarter profits for 2013 only rose 4%, less than the Wall Street prognosticators had expected. THAT is the explanation for the headline above.

And, while their stock took a small fall on Monday, it’s up 13% over the year. For the 34,000 stores worldwide, “sales edged up 1% at restaurants open at least a year.”

I dunno, sounds pretty damn good to me. But then comes the qualifier: “The small sales bump in the U.S. wasn’t enough to offset the higher advertising and promotional costs for those new items, as well as the reduced efficiency in restaurants.” THAT is the explanation for the second lead above.

The increased costs in doing business and the “reduced efficiency” sounds bad, I agree. Except, don’t these companies get to write these costs off of their tax forms?

Please keep in mind that any increase in sales for a corporation that enjoys a multi-billion dollar profit year after year is, in fact and deed, a huge increase in real dollars. That is, McDonald’s is making more money in 2013 than it did in 2012. But you would NEVER know that by the headlines and leads quoted above.

PS: About that “reduced efficiency” noted above: it is a continually growing problem in US businesses everywhere. This is at least partially (if not wholly) due to a combination of reduced education for American students at all grade levels and inadequate compensation.

Most of these restaurants pay “competitive wages,” which translates to “slightly more than minimum wage,” which means the job has no real value to most of the employees as they can usually replace one “competitive wage” position for another in a day or two. But that’s another story . . .


2 Replies to “tough year ahead for mcdonalds just ain’t so”

  1. neal – perhaps the headline is referring to the fact that mcdonald’s (at least locally) can no longer pay its employees with debit cards, but, rather, with an actual check! i don’t know if such was the case in your area, but it was a big deal here (nepa) within the past few months.

  2. I have heard about that. Thank Goddess the employees are now getting checks and not losing as much from their pay! But, no, that is not what the headlines were about. They were about exactly what is stated above. It’s common if you read the financial pages with any kind of skepticism to see this.

    A business has a record year (what they call a “career year” in sports) and then the next year sales are “off” (of course they are–that’s why it’s called a career year!) and the reporters make it seem like things are bad because they only made $500,000,000 in profit instead of the previous year’s $750, 000,000 . . .

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