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McDonald’s Hikes Big Mac Prices to Offset Surging Costs

By Tyler Durden | 28 October 2021

ZERO HEDGE — McDonald’s, faced with higher food and labor costs, is raising menu prices at a much faster pace than historical rates, focused on preserving profits. The problem with higher-priced menu items is that they will diminish the buying power of the working poor who frequent the Chicago-based burger giant.

Famous for the Big Mac burger, the company is paying more for food, packaging and other supplies, CEO Chris Kempczinski told investors Wednesday. He said commodity costs are up 3.5% to 4%, up from the 2% increase earlier this year. On top of that, labor costs are up at least 10%. Rising labor and commodity costs are pushing up menu prices in the US by approximately 6% this year.

“Certainly, I was hoping and expecting that we were going to see the situation improve maybe a little bit more quickly than what’s materialized,” Kempczinski said.

The news of McDonald’s increasing menu prices comes as the restaurant industry battles a supply chain crisis (read: here & here) and labor shortage that is disrupting operations. The labor shortage issue has been widespread for the burger chain – even forcing some stores to limit hours of operation. It has become harder than ever to retain or even find workers. […]

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