A sign posted in front of a McDonald's restaurant in San Leandro, California, on February 6, 2024.
Justin Sullivan | fake images
a summit McDonald's The executive is weighing in on claims that the company has increased its prices.
Joe Erlinger, president of McDonald's USA, said in an open letter Wednesday that the average price of McDonald's menu items has increased about 40% since 2019. The breakdown comes in response to claims on social media from House of Republicansamong others, that the fast food company raised prices by more than 100%.
“Americans across the country are making difficult decisions about where to spend their hard-earned money,” Erlinger said. “And while we've been working hard to ensure our fans have great reasons to visit us, it's clear that we, along with our franchisees, must remain 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 of a 10-piece McNuggets meal increased 28% during the same period, and the price of medium fries increased by 44%. .
Erlinger added that the cost increases are linked to similar increases in input costs, such as crew salaries and the cost of goods.
“For a brand that proudly serves nearly 90% of the U.S. population each year, we feel a responsibility to make sure real data is available,” Erlinger said.
Consumer prices increased 3.4% over the past year, according to the latest data from the Bureau of Labor Statistics. In response to persistently higher costs, some consumers are pulling back from the restaurant industry, a trend that has not escaped the fast-food giant.
McDonald's recently reported in its first-quarter earnings report that same-store sales were below expectations. The company will also soon offer a $5 meal for about a month, starting June 25.
That deal will include a McChicken or McDouble, four-piece chicken nuggets, fries and a drink, CNBC previously reported.
BTIG analysts characterized the promotion as 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 increases to refocus on a deeper value offering. We believe the new deal of meals could actually hurt sales (check the drop) and margins, but they will help reestablish McDonald's as a value leader in the industry,” the analysts said in a note to investors.
An independent advocacy group for McDonald's franchisees is pushing to make the discount offer sustainable for operators, saying it will require more investment from the company if it maintains the menus beyond the initial month.
“There is simply not enough profit to discount the 30% for this model to be sustainable. A financial contribution from McDonalds is needed,” the National Owners Association board of directors wrote in a letter to members that was seen by CNBC.
—CNBC's Kate Rogers contributed to this report.
