McDonald's adapts to Brazilian trend

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SAO PAULO -- A Brazilian phenomenon called "food sold by weight", in which consumers choose what they want to eat and are charged by weight, is jeopardizing the dominance of traditional fast food restaurants. McDonald's has responded by lowering its prices. French fries are 18% cheaper and the price of a Big Mac was reduced from $2.72 to $2.59.

McDonald's is an established player here, entering the market 19 years ago and today boasting 296 stores. Its marketing strategy of fast-food purveyor to the middle- and upper-classes was upset three years ago with the mass migration of Brazilians from poverty into the C and D socioeconomic classes following the introduction of a new currency and economic reform package that stabilized the economy.

Cheap food is now king, with many fast foods outlets offering meals for less than a dollar. Competition has intensified. Twenty years ago, there were 300,000 restaurants, bars and other food outlets in the country; now there are 756,000.

Copyright April 1998, Crain Communications Inc.

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