McDonald's Marks Up Double Cheeseburger

The world's largest restaurant company is replacing the double cheeseburger on its dollar menu with the McDouble, a sandwich with two beef patties and just once slice of cheese, Greg Watson, vice president of marketing, said in a statement.

"These changes will ensure we continue to satisfy our customers' tastes and wallets," Watson said.

The McDouble is 6 cents cheaper to make than the double cheeseburger, but in tests, McDonald's has seen customers opt for the latter sandwich up to 70% of the time, J.P. Morgan analyst John Ivankoe said in a recent research note.

At that rate, the changes to the dollar menu could help boost the average McDonald's franchisee's cash flow about $20,000 a year to $310,000, Ivankoe said.

McDonald's shares rose 2.3% in recent trading to $56.78, and for the year, they were down 3.6%, the second-best performer in the Dow Jones Industrial Average.

As ingredient costs ticked up earlier this year, restaurant chains sought to save money by experimenting with new recipes for popular products. McDonald's top competitor, Burger King Holdings Inc. (BKC), has been testing Whopper Jr. sandwiches with smaller patties in some markets.

Operators of McDonald's restaurants have complained that keeping the double cheeseburger at a fixed price while ingredients rose was crimping their bottom line while also drawing unprofitable traffic into each location.

Many had already removed the sandwich from the dollar menu.

-- Paul Ziobro, Dow Jones Newswires