McDonald’s has always been the go-to fast food restaurant place for decades worldwide. The simplicity of a meal and the cheap prices at McDonald’s have attracted people to locations around the world. Historically, it has always been cheaper than most fast-food restaurants, especially before the 2000s. So people now are definitely not happy with the prices skyrocketing.
McDonald’s raised prices because of the new law, signed by Gavin Newsom, the California governor, raising California’s minimum wage to 20 dollars per hour. According to the CEO of McDonald’s, Chris Kempczinski, “…there is going to be a wage impact for our California franchisees…I don’t think at this point we can say exactly how much of that is going to work its way in through pricing…Certainly, there’s going to be some element of that that does need to be worked through with higher pricing.”
For nearly a year, companies have been raising prices because of inflation, particularly after Russia’s invasion of Ukraine, which sent prices soaring in restaurants and businesses all across the world. This can be attributed to supply chain inefficiencies. These can be caused by labor shortages and delays in shipping, usually caused by long customs processes or traffic on transportation routes.
McDonald’s customers are pushing back against higher prices in some markets and adding fewer menu items to their orders. The CEO of McDonald Chris Kempczinski says, “Shares of McDonald’s fell slightly Tuesday, but the stock hit a new 52-week high.” McDonald’s is up about 10% so far this year because of the stock hit.
The price of a Big Mac Burger – which is one of the most famous menu items – currently sits at $5.89. McDonald’s reported that its revenue was up 14% in the latest quarter for McDonald’s sales and was driven by “strategic menu price increases.” Additionally, Chris Kempczinski said, “Diners are less likely to add extras like French fries to their orders. Consumers are still buying Big Macs and McNuggets. The prices will not stop people from getting food as seen because of familiarity with McDonald’s.
