The fast food business is a cut throat one, with rival franchise chains continually trying to reinvent themselves and come up with innovative menus. And given that consumers have just so many discretionary dollars to spend, given current economic conditions, the business model comes under even more stress, forcing competitors into a margin war. This is precisely what McDonald's Corporation (MCD) is facing, as CFO Peter Bensen openly admitted during the Q1 earnings announcement:
"That battle for market share has become so critical for the long-term health of business; we're willing to sacrifice that margin"
Obviously, from the comparative share price chart above it appears that, at least for now, competitor Burger King Worldwide, Inc. (BKW) is winning the battle, with Yum! Brands, Inc. (YUM) a clear laggard. And given the faltering state of global economies, and less than stellar consumer confidence in the U.S, investors are curious to know whether McDonald stock still represents a buy, hold or sell value proposition for them.