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The world’s most expensive and cheapest McDonald’s

Posted in
Monday November 2, 2009

AS if Iceland does not have enough problems, McDonald’s has just announced the closure of its three restaurants there and said it has no plans to return.

Apparently, most of the ingredients used by McDonald’s in this crisis-hit country are imported from Germany and the franchise holder would have to raise prices by at least 20% to produce an acceptable profit.

The story was important enough to make it to the front page of the Financial Times on Oct 27.

According to the report, for McDonald’s to stay profitable in Iceland, the Big Mac there would have to be priced above US$5.75, which is what it costs in Switzerland, home to the most expensive Big Mac, according to the Big Mac index.

The Big Mac index is published by The Economist as an informal way of measuring the purchasing power parity (PPP) between two currencies and provides a test of the extent to which market exchange rates result in goods costing the same in different countries.

You can get a good exposition of how this index works, including its limitations, by referring to Tan Sri Dr Lin See Yan’s column on July 25 entitled “Burgernomics and the ringgit”.

Since this column is not into heavy economic stuff, I was more interested to find out where the most expensive and cheapest Big Macs are to be found.

As of February this year, the most expensive burgers were in Norway (US$5.79), Switzerland (US$5.60), Denmark (US$5.07), Sweden (US$4.58) and Eurozone (US$4.38).

Now, here’s the interesting part. According to the same index, Malaysia (US$1.70) actually ranks No 1 among the five most affordable Big Macs, ahead of Hong Kong (US$1.71), China (US$1.83), Thailand (US$1.86) and Sri Lanka (US$1.95).

To be frank, I am not a real fan of fast food but when I am overseas and am at a loss as to what to eat, it is quite comforting to be able to step into a McDonald’s, KFC or Pizza Hut outlet, and order familiar items.

We also have to understand why some of our overseas friends do not like to be too adventurous with our wide array of Malaysian hawker fare, especially when they are on a short trip. There’s nothing worse than having to repeatedly run to the toilet because their stomachs are not accustomed to our delicious, spicy stuff.

Still on the same subject, I am trying to figure out why the fast-food joints are increasing the number of their 24-hour outlets.

In my neighbourhood, they compete with the Syeds and other 24-hour teh tarik outlets, and for the life of me, I cannot imagine anyone preferring a snack plate of original recipe chicken over a piping hot bowl of sup kambing in the hours after midnight, or a Big Mac over the Ramly burger sold at the roadside stall.

But they have obviously done their research, and I suppose my preferences are fast being overtaken by more global taste buds. That may well impact on the Burgernomics figures eventually, since prices are determined to a large extent by supply and demand.

I like to think that I’m doing my bit to keep Malaysia in the top ranking for most affordable Big Macs – by sticking to my teh tarik and roti canai during EPL matches.

Quoted from: http://biz.thestar.com.my/news/story.asp?file=/2009/11/2/business/5012387&sec=business

My comment:

Owh! Big Mac kat Malaysia rupanya dah dikira sangat murah. Tapi masih tetap mahal bagiku... >.<

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