11.01.2009

Iceland waves bye to Big Mac









AP photo



Is McDonalds and Big Mac really “invading” into every corner of the world? At least it is not the case anymore. McDonald’s recent announcement that it would close all and the only three restaurants in Iceland really shocked the world. Has McDonalds lost its ground? Not likely, based on how people in Iceland claimed they love the brand in the interview (Reuter interview). Not to mention that the Big Macs are within the best budget during the crunch. So it brings about only one question, how terrible is the economy in Iceland if McDonalds cannot even survive?


Big Mac is such pervasive product around the globe that it has been regarded as an economic indicator. And here in this story, if it were not for the brand McDonalds the event would not attract the crazy attention of world media. Frankly speaking, you could just describe the event and continue with a little analysis of current Iceland miserable economic conditions. Or, when you explore the history of the “Golden Arches” in Iceland, you could easily turn the story into an interesting anecdote, which is exactly what some of the major media did last week. Or, to really get the “insider’s story” (opinions of the Iceland residents), I could just turn to various blogs.


Start with the coverage on FT, which is the most objective one I have read. The whole article sticks to the implication of the simple exit of the food chain company. Even in the first sentence it is clearly claimed that the news revealed the terrible situation of Iceland economy. Instead of presenting the details, the write spent first half of the news explaining the background information, including the shift of roles Iceland has undergone since the crisis last year. Rather than direct evidence of the event, all the information mentioned serves as more of the supplement to the “macroeconomic view” of the article. Interview from the Icelandic franchise holder has been quoted a lot and some figures about the price comparison were provided. It remained unbiased and comprehensive when mentioning local’s response to MD’s pull-off, which included both disappointment and positive comment.


Similar to FT’s style, the news from Guardian is very descriptive and more detailed. Instead of trying to analyze the economy in Iceland, Guardian took a more subtle angle from MD’s side. ( the examples of other EU countries without Big Macs, the historic and surprising fact that Iceland is not the only country that MD said goodbye to.) All these maybe appeal more to ordinary customers rather than economic info seekers. Besides, the high import fee of the raw materials was one of the key points in the article. More details were presented regarding the boost of price due to the serious depreciation of Iceland currency Krone. The most vivid comparison came from words of the franchisee, “For a kilo of onion, imported from Germany, I'm paying the equivalent of a bottle of good whisky”. (I will talk more about this interesting point later.) In all, most info provided in this news are the same with the FT one.


Take a look at AFP online, it is even shorter and more condensed. Apart from informing the direct and more obvious bits, the only additional info is the fact that the then Prime Minister of Iceland ate the first Big Mac more than 10 yr ago, which looks quite abrupt to me at the end of an extremely concise article. However, when I studied more from some blogs covering the topic, I found out the ironic part ( The charm of news related blogs ).– the then PM of Iceland was just the mister who was later the governor of the central bank and was mainly criticized for the bankrupt of the country last year. That is to say, he was somehow responsible for the departure of Big Mac.


It is quite surprising to find the “anecdote style” of the news in Bloomberg. Contrary to its daily strictly business news style, this one is more “colorful” with a number of quotations from domestic blogs. The actual news part did a great job quoting the interviewee and price data. According to this article, the reason just lies in the collapse of krone. From the subtitle “Big Mac Index”, the story got interesting due to the writer’s extra research. The actual list of Big Mac Index list proved the crazy price index on the island. Besides, the links to several Iceland blogs and little background info about the then PM of the country both made the story stand out from equivalent ones on other financial media.


Another example of “relaxed style” comes from a short piece on BBC. The highlight here is how it emphasized the enormous obstacle when operating the business in Iceland. The subtitle and bold font of “No sense” did represent the franchisee’s feeling towards the situation and intensify the audience’ feeling as well. What is more, the unique usage of quotation enriched the article. Instead of quoting the whole sentence, the writer just did the keywords along with the sentence structure on purpose. (eg, (the restaurant) has never been this busy while ( profit) never lower). Thus the news attracted immediate attention from the audience and carried the their emotions along with it.


There is also tons of news from Chinese media. Surprisingly, except for official media owned by the government, most news used the “onion-whiskey” comparison in question in the headline, which is not quite professional but eye catchy for many Chinese readers who are used to looking for “fun facts” or anecdotes in the far western world.


Finally, from various blogs I get the real reactions from the locals. Blogs are always more attractive in this way, not as objective or accurate as news but more insightful and not afraid to reveal any emotions. According to the locals, a mixed feeling has arisen towards the issue. Most people feel positive towards it, for the fact that maybe MD is a sign of “American culture colonialism” and it leads to obesity. Besides, the exit of MD really benefits local brand. This one, which is also edited into a comment on Guardian, revealed such relief. (“ you wont be missed” ). Above all, the comment did point out something all major media overlooked. Though it is for the meltdown of the economy, it is not MD itself but the local franchise holder who made the decision. Also, it is not the farewell of fast food and burger—the holder will convert the places into local burger shop Metro.


Now I can’t help asking, “Has the media been exaggerating the effect of the news( MD quit)?” Just for the fact it is THE McDonalds. Maybe. McDonalds can make headline itself. In PPP theory of x change rate, Big Mac is used as index for two countries’ purchasing power comparison; in Mr. Friedman’s book, it has been quoted as a symbol of globalization. And in financial media world, McDonalds, plus the miserable Iceland in the crisis, made the best hit.



1 comment:

  1. Excellent. A good find - an interesting story. 8.5/10 (Sorry you weren't in class this week. I hope you are OK. Just to let you know that one more blog is due for last week in order to keep your number of entries up so you don't lose out in your grade.)

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