Connect with us

Hi, what are you looking for?

Economy

McDonald’s exec says average menu item costs 40% more than in 2019

A top McDonald’s executive is weighing in on claims that the company has jacked up its prices.

Joe Erlinger, president of McDonald’s USA, said in an open letter Wednesday that the average price of McDonald’s menu items is up around 40% since 2019. The breakdown comes in response to claims on social media from House Republicans, among others, that the fast-food company upped prices by more than 100%. 

“Americans across the country are making tough calls about where to spend their hard-earned money,” Erlinger said. “And while we’ve been working hard to make sure our fans have great reasons to visit us, it’s clear that we — together with our franchisees — must remain laser-focused on value and affordability.”

Erlinger said the average price of a Big Mac meal today is $9.29, up 27% from $7.29 in 2019. The price for a 10-piece McNuggets meal is up 28% over the same period, and the price of medium french fries increased 44%.

Erlinger added the cost increases are tied to similar increases in input costs such as crew salaries and cost of goods.

“For a brand that proudly serves nearly 90% of the U.S. population every year, we feel a responsibility to make sure the real facts are available,” Erlinger said.

Consumer prices have increased 3.4% over the past year, according to the latest data from the Bureau of Labor Statistics. In response to persistently steeper costs, some consumers are pulling back across the restaurant industry, a trend that has not spared the fast-food giant.

McDonald’s recently reported same-store sales below expectations in its first-quarter earnings report. The company will also soon offer a $5 value meal for roughly a month, beginning June 25.

That offering will include a McChicken or McDouble, four-piece chicken nuggets, fries and a drink, CNBC previously reported.

Analysts at BTIG characterized the promotion as being more about value perception than a profit driver.

“In our view, this new deal is more about value perception, seeking to change the media narrative around McDonald’s recent price hikes to refocus around a deep(er) value offering. We believe the new one-month meal deal could actually hurt sales (check decline) and margins, but help reinstate McDonald’s as a value leader in the industry,” the analysts said in an investor note.

An independent advocacy group of McDonald’s franchisees is pushing to make the discounted offering sustainable for operators, saying it will require greater investment from the company if it sticks around menus beyond the initial monthlong run.

“There simply is not enough profit to discount 30% for this model to be sustainable. It necessitates a financial contribution by McDonalds,” the board of the National Owners Association wrote in a letter to membership that was viewed by CNBC.

— CNBC’s Kate Rogers contributed to this report.

This post appeared first on NBC NEWS

Enter Your Information Below To Receive Free Trading Ideas, Latest News And Articles.






    Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!

    You May Also Like

    Latest News

    Britain’s Prince and Princess of Wales have released a new photo of Prince Louis to mark his sixth birthday on Tuesday, the first image...

    Investing

    Overview Energy Fuels( TSX:EFR, NYSE:UUUU) has been the largest producer of uranium and vanadium in the United States and an emerging producer of rare...

    Editor's Pick

    There is no trial in recent history, or possibly all of American history, that can rival the one underway in Lower Manhattan. For the...

    Latest News

    President Joe Biden travels to Triangle, Virginia, Monday to mark Earth Day, where he’ll unveil $7 billion in grant funding for solar power under...

    Disclaimer: Dealwithbiz.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.


    Copyright © 2024 Dealwithbiz.com