Comment 8 for bug 66705

I had the same problem on Feisty (upgraded from Edgy), but for me the solution wasn't in the .local directory, but in the .config directory.

IOError: [Errno 13] Permission denied: '/home/frans/.config/menus/applications.menu'

so after

sudo chown -R <user>:<user> .config

Alacarte worked as advertised.