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The inflation economy is even getting to fast food giants, with a top executive at McDonald’s pushing pack on reports that the chain has jacked up its menu prices by 100%.
In open letter on Wednesday, Joe Erlinger, McDonald’s U.S. president, said that a string of viral social media posts and reports that McDonald’s has raised prices beyond the rate of inflation are “inaccurate.”
“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, adding that the chain has increased prices on average by 40%.
The chain has not been immune to inflationary pressures, he said, adding that the company has had to deal with a global pandemic, supply chain snarls, and wage increases.
“Americans across the country are making tough calls about where to spend their hard-earned money,” Erlinger said.
McDonald’s, a leading player in the fast food business, also operates through a franchisee model. About 95% of its U.S. based restaurants are franchisee owned. Those owners set their own prices, which take into account expenses to run their business. Erlinger said that franchisees try to mitigate those costs by running promotional offers.
But even so, Erlinger said that menu prices and the costs to run those restaurants have indeed gone up and “that’s why prices for many of our menu items have risen,” Erlinger said.
In 2019, a Big Mac cost $4.39. Five years later, the burger costs $5.29, about a 21% increase. That increase also applies to a 10-piece McNugget meal, according to Erlinger’s open letter.
Meanwhile, the average price of medium-sized fries has increased by 44% since 2019. The fried potatoes were once $2.29, but now costs $3.29. During that time, a quarter pounder with cheese averaged to $4.49, but has increased by 20% to $5.39. An egg McMuffin cost $3.49 five years ago, but now costs $4.29, a 23% increase.
“I fully expect the prices at your local McDonald’s to be an area of conversation and focus in the coming months,” Erlinger said.
Nonetheless, McDonald’s is pushing ahead with its bid to outdo Burger King and Wendy’s, each of which have launched their own deal bundles. Earlier this month, McDonald’s said that it would launch its $5 meal deal after operators approved the limited-time promotion. But even so, the chain expects the four-week deal to cost a hefty price, and has tapped Coca-Cola to help offset the promotion. The company is expected to chip in an estimated $4.6 million.