McDonald's Suffers Another Blow

In October, McDonald's said that it would scale back its restaurant opening schedule, something analysts had been advocating as a way of reining in costs. However, the restaurant operator also reintroduced its dollar value menu, locking it in a price war with Burger King, Jack in the Box (JBX Quote - Cramer on JBX - Stock Picks) and others at the expense of margins.

For the sake of the fast-food sector, analysts are calling on McDonald's to get rid of the dollar menu. "McDonald's discounting activity is not only hindering the Golden Arches' financials, but the entire fast-food sector's health," said Mark Kalinowski, an analyst at Salomon Smith Barney, in a research note.

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