The news from Maccas was … good news for shareholders!
Anyway, this isn’t a hindsight post.
The news on Monday:
- Global comp sales were down 1% in Q2 compared to +0.5% expected by analysts. US sales fell 0.7% in Q2.
Why could this be good news? Well, its all about ‘inferior goods’.
No judgement! … Inferior goods are not necessarily of lower quality; the term simply refers to the negative relationship between income and demand.
An inferior good is a type of good for which demand decreases as consumer income rises, and conversely, demand increases as consumer income falls. This behaviour is contrary to that of normal goods, where demand typically increases with rising incomes.
The classic examples of inferior goods include:
- Instant noodles: As people’s incomes increase, they tend to buy fewer instant noodles and instead purchase more expensive or healthier food options.
- Public transportation: As income increases, individuals may prefer to buy cars instead of relying on public transport.
- Generic or off-brand products: Consumers might switch to brand-name products as their disposable income increases.
And … 4 … Maccas?
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OK, you got me. This is a bit of a tongue in cheek post. Still, food (sry, not sry) for thought.
This article was written by Eamonn Sheridan at www.forexlive.com.
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