mcdonalds problems started when they raised coffee prices.
Near me, they've had coffee on sale almost continuously for a long time - more on that after the next quote.
The problem right now with McDonalds is that it's not really that cheap anymore and I think that's a big reason why it's hurting. They've tried to expand into the premium market to reach "fast casuals" but they raised the prices on everything as well. They have the taint of shitty food on them but are asking premium prices for it. I'm sure part of it is that the cost of beef has gone up enough that you can't really have a super cheap burger anymore. You can serve cheap, shitty food that people will love, but you have to charge less for it.
I think another problem is market saturation. Many areas used to have a McDs, a BK, and one or two other chains. Now, those areas are mile long strips of nothing but fast food options - and by the time you get to the end of the mile, you've passed another McDs along the way.
But, I agree with you on price. Wife and I were on a trip somewhere - gas stations were far apart - like one station every 2 or 3 exits; the food signs at exits were pretty scarce. So, we settled for a McDs. Got the 1/3 pound sirloin with cheese and mushrooms, made it into a meal. I thought, "hey, this isn't half bad." But, at nearly $20 for 2 people, I realized that for that $20, I could have gotten a hell of a lot better of a burger elsewhere.
Now, re: coffee on sale. I'm next to a small village of just a few thousand people. There isn't a Wal-mart in my entire county; and very few fast food places. We're right along an interstate in NY, with plenty of cheap land available very close to the offramps. There have been plenty of rumors of a Dunkin Donuts or a Tim Hortons opening up here. But, at least to me, it seems that the local McDs franchise has figured out that their best bet for long term profits is make it appear that a new place is going to have a tough time competing. And, really, if McDs has coffee for 25 cents (for a small, last time I looked at their sign while driving by), do you really think you're going to get a lot of the locals to pay $3 for a cup of coffee? You might be a *little* better in quality, but it appears that the McDs are using the price for what is a very cheap product to sell, in order to keep the coffee types coming through their drive-thru and ordering their breakfast items (on which they make the profit).