Fast Food Giant Faces Criticism Over Price Hikes
The CEO of McDonald’s, Chris Kempczinski, has admitted that the sales for the fast food giant have dipped as a result of increased menu prices. The Chicago-based chain has faced heavy criticism for its high-priced items, including the Big Mac combo priced at nearly $18. In response to the backlash, McDonald’s has promised to prioritize affordability, according to the New York Post.
Focusing on Affordability in the Future
Kempczinski stated during an earnings call with analysts that McDonald’s would shift its focus to affordability as it heads into 2024. The chain aims to address the concerns of low-income consumers who have stopped patronizing the restaurant due to inflation-driven price increases. Although some global same-store sales grew by 3.4%, it fell short of the expected 4.7% projected by Wall Street.
Increased Competition from Eating at Home
McDonald’s CEO acknowledges that eating at home has become more affordable, leading to increased competition for the fast food giant. Kempczinski stated that the battle for customers is primarily with the low-income consumer segment. Prices at McDonald’s are anticipated to rise at a slower pace, according to restaurant analyst Mark Kalinowski.
Fast Food Prices May Continue to Soar
Last week, a McDonald’s location in Connecticut faced criticism when a customer was charged $7.29 for an Egg McMuffin and nearly $5.69 for a side of hash browns. The franchise in Darien, Connecticut was particularly called out for charging $17.59 for a Big Mac combo. As minimum wage hikes go into effect across the country, fast food prices in general are expected to climb even higher. In California, for example, many fast food workers will earn $20 per hour starting from April 1. Both McDonald’s and Chipotle have indicated that they will need to increase prices in response to the high labor costs.