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McDonald’s Losing Ground To Health Conscious Citizens

Who doesn’t like to eat, but a culture that promotes eating junk is heading towards disaster. Most industrialized nations are dealing with the problem of obesity, but the U.S. has dangerously tilted the scales of balance. According to the Centers for Disease Control and Prevention, more than one-third of U.S. adults are obese, which translates to 34.9% or 78.6 million. According to the most recent data, all 10 states with the highest rates of obesity are in the South or Midwest. The two states of Mississippi and West Virginia have the highest rates of obesity at 35.1%, while Colorado has the lowest rate at 21.3%. It is time for the nation to sit up and ask what went wrong.

Source: By JKCarl via Wikimedia Commons

Health and wealth

It is the second leading cause of mortality, after smoking, in the U.S. This is because obesity leads to a number of ailments that include heart disease, diabetes, high blood pressure and strokes, which can prove to be fatal. More than this, it is a lifelong struggle with your health. With the disease taking firm root among Americans, it has been a tough battle against it. However, perception is slowly but steadily changing among the citizens. People are becoming more conscious of what they are putting in their mouths and also exercising; schools are trying to educate children about the pros and cons of junk food versus a healthy diet. With increasing awareness comes the rejection of junk food and fast-food options.

America, one of the largest consumers of fast foods which led to huge profits for companies like McDonald’s Corporation (NYSE:MCD) and Coca-Cola (NYSE:KO), is now the very reason for their falling share prices. The home consumers for these products are turning towards healthier options, especially now that the spurt in obesity among children has been causing widespread concern. It is bringing up an entire generation that will face health issues through childhood into adulthood. The government, families and schools have taken up this issue as a social responsibility to beat the menace.

Tale of fast foods and soft drinks

This has resulted in falling consumption of such fatty products, and thereby, the changing mindset is reflected in the dip in shares. Coke, which was hailed in the '80s as an iconic refreshing drink, in its third quarter declared profit declined considerably from last year. The company recorded sales that declined for nine consecutive quarters. With the younger generation opting for drinks with lesser calorie content, Coke is looking at diversification. The market is rife with speculation that the soft drink giant is eyeing to take over White Wave Foods' manufacturing plant-based beverages and having 14% share in the $9 billion global non-dairy beverage market.

MCD has also been facing the issue of falling share prices, which also led to the sacking of former CEO Don Thompson. The company has been looking at various options like a healthier menu to boost its sagging popularity, especially in its home country. The burger giant is also facing stiff competition from locale players like Chipotle Mexican Grill (NYSE:CMG),Five Guys Burgers and Fries, Sonic Corporation (NASDAQ:SONC) and Shake Shack (NYSE:SHAK) which offer more appealing and slightly diverse menus with local tastes. Its new CEO Steve Easterbrook is expected to turn around the fortunes of this company by once more attracting the US crowd.

However, it won’t be easy, anymore. As more and more taxpayers’ money is being spent to treat medical problems arising from obesity, the fast food and soft drink companies need to watch out. Obesity is not only a lifestyle problem, but it is a direct result of abundant supply of junk food at cheap rates. Burgers and Coke are easily available and cheap options. But in the long run, eating healthy reduces medical costs and the age-old adage, health is wealth, is still true today – lesson learned the hard way by Americans.

About the author:

We are a group of analysts exploring and analyzing different domains of business and writing reviews based on information available in public domain web portals. We do not hold any stock or investment position in any of the companies that we write for.

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