Switzerland STILL has priciest Big Macs in the world

Switzerland has the most overvalued currency in the world according to The Economist’s Big Mac Index 2017, which the alpine country tops once again.

Switzerland STILL has priciest Big Macs in the world
Photo: McDonald's Switzerland
Invented in 1986 as a light-hearted guide to purchasing power parity, the Big Mac Index compares the cost of a McDonald’s Big Mac burger in countries across the world. 
Using the US dollar as the base rate, the 2017 Index showed a Big Mac in Switzerland to cost $6.35 compared with $5.06 in the US, meaning the Swiss franc is overvalued by 25.5 percent.
The exchange rate that would equalize the price of a burger in the two countries is 1.28 francs to the dollar, while the actual exchange rate is 1.02 francs.
The franc far surpassed the second highest country, Norway, where a Big Mac cost $5.67, overvalued by 12 percent.
Sweden, Venezuela and Brazil were the only other countries to have pricier burgers than the States. 
According to this ‘burgernomics’, the euro and the pound are undervalued by 19.7 percent and 26.3 percent respectively, said The Economist. 
However, the situation is different in an adjusted version of the index which takes into account labour costs and GDP. 
When adjusting for Switzerland’s average income, the franc is only overvalued by four percent, it found.
Brazil topped the adjusted index, which showed the Brazilian real to be 66 percent overvalued.
“This adjusted index addresses the criticism that you would expect average burger prices to be cheaper in poor countries than in rich ones because labour costs are lower,” said the Index authors. 
“The relationship between prices and GDP per person may be a better guide to the current fair value of a currency.”  
Switzerland has topped the raw index for several years. 

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Swiss lose appetite for Big Macs and fries

The Swiss showed less of an appetite for fast food last year, paying fewer visits to McDonald’s.

Swiss lose appetite for Big Macs and fries
Photo: McDonald's Switzerland

The US burger giant reported that the strong franc and cross-border tourism took a bite out of its turnover which dropped by 33 million francs to 702 million francs.

In a statement McDonald’s Switzerland said in a statement that it was the first time since 2003 that turnover had fallen.

Restaurants in border areas were particularly affected, it said, as customers preferred to eat in its restaurants in neighbouring countries.

Restaurants just over the border in France, Germany, Italy and Austria had all seen their revenue grow, it said.

The 163 McDonald’s restaurants in Switzerland had 100 million customers last year – six million down on the year before.

With 275,000 customers per day McDonald’s is still the biggest restaurant chain in Switzerland, according to the statement.

The company is now hoping to win back market share with new offers. From March 23rd more varieties of coffee will be available in all restaurants.

The chain is also testing out table service in 15 selected restaurants.