McDonalds did the dirty here too.
I loved their Caramel Sundaes, I'd got there just for that, buy some other food deal and read the free newspaper. Every day.
Then, they upped the price from NZ$1.95 to $2.20. hmmmm OK.
Then, they made the sundae cup smaller HMMM ok...
Then, They advertised it as 'The sundae you always liked' ahhhh
Then, they changed the flavour and added corn syrup. YUK !!
So, I stopped going there.
That was the first year that McD's ever made a loss.
Do I care? Nah, because I don't go there any more. They might as well be selling tampons for all intensive purposes. I don't buy them, probably never will.
I had a similar experience with McCains grapefruit juice in a carton. I brought it, I liked it. Really liked it. Liked the pulp in it too. 1litre = $4
It got popular. At first it was just a sideline to their other fruit drinks.
Then it became a juice leader in their sales.
Then they thinned it down to %66 grapefruit and upped the pulp factor. Well OK, at $4 maybe. $3 on special, yes.
Then they dropped the grapefruit to %33, took out 1/2 the pulp amd added some sort of sugar. Even at $3 a litre its not selling and I'm not buying it either.
What really gets me about this is 'Its all about share prices'
They try to improve share prices, since upper managements getting part of their pay in shares.
So they cheapen something to make more profit.
It backfires and they sell less after a while when people relise its not as good.
Profits drop, so does the share price. Managment relise in theory they are loosing tens of thousands of $$.
So they look at how to increase share prices.
Raise the PE ratio is a quick fix.
How do they do that? They lower expenses.
How do they do that quickly? Wages is a expense... Fire workers. Say its "Just the market and thats how things are, see yah".
PE improves short term. Shares go up.
Then the cost cutting starts taking its toll. Standards drop, middle managment cannot take up the slack as they are white collar and don't produce product.
"Fix it" upper management say. get more workers, who are green, but at minimum wage..is the answer. "Its a 'investment' is what it is on paper.
Then, more product, lower standards, same profit as before.
"Gotta make more profit" say upper management.
"Cheapen the quality and screw the suppliers for every cent" say middle management.
And now they have become what they started out not wanting to be.
'Good quality at reasonable prices'. turns into,
'Cheap sickly sweet artifically coloured air filled nothings in a large box'.
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