The low-end consumer market is spending and the middle-end consumer is curbing expenses and turning to low-priced food alternatives such as McDonald’s.
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New York, NY (PRWEB) December 13, 2011
The world’s largest restaurant chain, McDonald’s Corp., reported that stores open at least one year in November saw sales rise 6.5% in the U.S. According to Michael Lombardi, lead contributor to Profit Confidential, this gives us insight into two main groups: the low-end consumer and middle-income consumer. The numbers from McDonald’s provide a foreshadowing of what 2012 will be like for these two groups.
According to Profit Confidential, McDonald’s, with over 33,000 stores worldwide, is often referred to as a benchmark stock; a leading indicator of consumer spending behavior.
“The low-end consumer market is spending and the middle-end consumer is curbing expenses and turning to low-priced food alternatives such as McDonald’s,” says Lombardi.
In the post-recession environment, high-end retail sales market is doing well and the low-end retail sales market is doing well. “The middle-market, the average Joe American, is the one who has been experiencing the most post-recession pain” writes Lombardi in Profit Confidential.
Lombardi points out that nearly 15% of the U.S. population is using some form of food stamps; that’s 45.8 million people (Source: Wall Street Journal, 11/1/11). In 2003, McDonald’s stock sold at close to $10.00 a share. On December 8, 2011, it opened at $96.45.
McDonald’s has been raising its prices to consumers as McDonald’s cost of goods has risen. According to Lombardi, McDonald’s results signify that, as food costs rise, consumers are turning more and more to low-end restaurants like McDonald’s.
As McDonald’s is a leading indicator, Lombardi believes that 2012 will be another very difficult year for the U.S. consumer. “Companies like McDonald’s that cater to the low-end retail market, while increasing the nutritional value of their product, will continue to perform well.”
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market...before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
To see the full article and to learn more about Profit Confidential, visit http://www.profitconfidential.com.
Profit Confidential is Lombardi Publishing Corporation’s free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com.
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardi’s current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.