Posted on 10/28/2021 8:13:05 PM PDT by SeekAndFind
McDonald's is faced with higher food and labor costs, is raising menu prices at a much faster pace than historical rates, focused on preserving profits. The problem with higher-priced menu items is that they will diminish the buying power of the working poor who frequent the Chicago-based burger giant.
Famous for the Big Mac burger, the company is paying more for food, packaging, and other supplies, CEO Chris Kempczinski told investors Wednesday. He said commodity costs are up 3.5% to 4%, up from the 2% increase earlier this year. On top of that, labor costs are up at least 10%. Rising labor and commodity costs are pushing up menu prices in the US by approximately 6% this year.
"Certainly, I was hoping and expecting that we were going to see the situation improve maybe a little bit more quickly than what's materialized," Kempczinski said.
The news of McDonald's increasing menu prices comes as the restaurant industry battles a supply chain crisis (read: here & here) and labor shortage that is disrupting operations. The labor shortage issue has been widespread for the burger chain - even forcing some stores to limit hours of operation. It has become harder than ever to retain or even find workers.
Earlier this year, some McDonald's franchisees offered signing bonuses and paid interviews to attract new workers.
The National Owners Association (NOA), an independent, self-funded advocacy group of McDonald's franchisees, warned months ago that attracting new workers was challenging because generous unemployment benefits allowed many low-income workers to stay home and get paid more. NOA warned also warned an "inflationary time bomb" was imminent and would be passed along to customers:
"Inflation is the flip side to all of these changes," NOA said. "Price increases are happening everywhere you look and will continue as employers pass along these added costs. We will do the same. A Big Mac will get more expensive."
"Our government officials need to know what is happening out in the real world," NOA continued. "They need to know what they are creating; an inflationary time bomb."
Rising menu prices at America's favorite fast-food burger chain will only impact the working poor the hardest who see their real wages crumble as inflation continues to run rampant through the economy.
I remember when a MacDonalds burger cost 19 cents. 1968.
“Our government officials need to know what is happening out in the real world,” NOA continued. “They need to know what they are creating; an inflationary time bomb.”
The sad part is that by their actions they have shown that most of them couldn’t care less and this goes for either party. There are some who do care but they are far and few in between.
$15+ an hour and anti-capitalist COVID fear shutdowns and inflationary spending is expensive for the company and everyone involved.
They got rid of our favorite salad, too.
It will be interesting how this falls out for them. McD’s profit “guarantee” is for owners not small.
Mcdonalds economics is how you gauge inflation. How many Big Mac’s could you buy in 1980 on 3.35 an hour.
Maybe 4.
How many can you buy now at 15.00 an hour, maybe 4.
In 1998 a Quarter Pounder meal at my local mickyD was $2.99
today at the same McD location it is $9.58
Big macs are one of the worst mcdonalds food. Two small beef? patties on a big ass bun.
I remember around Thanksgiving 1974 McDonalds’ celebrated its 20th anniversary and was selling burgers for the original 1954 price, I think it was 15 cents.
Being someone who tries to minimize carbs as much as possible, I used to buy double quarter pounders with cheese and throw out the buns. Depending on which McDonald’s that I went to, the price came out to $6.00 to $6.50.
The cost to buy the beef and cook them, based on my last price check:
Beef: $1.70
Cheese: $0.15
Rest: $0.25 (Ketchup, onions, pickles, dish soap, hot water, natural gas, etc.)
So, about $2.10 to make the same thing at home, and it tastes exactly the same. Sorry McDonald’s, you lose, and you can thank Big Government for it.
I don’t eat them, but I can determine inflation by them.
:^)
Quarter pounder is the only thing I ever eat there, and that’s like twice a year.
try making the big mac edible again
It has not hurt their stock price. The 52 week low was $202.73 and the 52 week high was $249.95
I have owned McDonald’s stock for about 30 years. So I can afford a big Mac but I don’t really like that burger.
Always enjoyed their coffee much more that I do buying coffee at five bucks
In the late 1990s, the average retail worker wage was $6-8 an hour. A Big Mac was about $2.50. I remember being a cashier and most meals people bought were $4-5. The Double Quarter Pounder was the most expensive and pushed $6 for the meal. The cheapest item on the menu was a basic burger at 79 cents. A cheeseburger was 89 cents.
Years ago, the Big Macs I ate looked like the one pictured in the article above and were good.
A few years ago, I ordered a Big Mac for the first time in many years, and it wasn’t much larger than a hamburger, and the bun tasted like cardboard. No thank-you at any price.
McDonald’s is a big woke organization. No sympathy from me.
I remember even in the 1970s and you could buy a McDonald’s hamburger, fries and a Coke for less than a dollar.
So how much is a Big Mac these days? It’s been years since I’ve had one.
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