McDonald's pushes back on claims about high menu prices

The fast-food giant wants consumers to know exactly how much prices have increased.

Jun 5, 2024 - 22:30

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McDonald's pushes back on claims about high menu prices

Inflation and pricing have become increasingly political and weaponized.

Social media has not helped, especially since Elon Musk took over the former Twitter, renamed it X, and removed most safeguards against misrepresentations.

The unregulated nature of social media removes context, which can lead to false narratives. Everyone, for example, has seen Facebook and X posts showing crazy high gas prices. Those posts, however, don't show the remote location of the gas station picture or the average price of gas in that area.

Instead, an out-of-context image has been used to advance the political idea that gas prices are out of control due to President Joe Biden. Gas prices over time can actually be tracked and compared factually.

The U.S. Inflation Calculator shows gas prices adjusted for inflation in 2022 dollars. When you do that, a gallon of gas has ranged between $4.37 and $4.02 between 1978 and 2022. It's a narrow range and 2023 came in at $4.06, toward the lower range of history on an inflation-adjusted basis.

Perception is not reality and McDonald's (MCD) has faced some of the same narrative problems (perhaps without the political overtones) that the gasoline industry has. Addressing the issue, McDonald's President Joe Erlinger wrote an open letter to the chain's customers.

The Big Mac's price has gone up but not nearly as much as people think.
Image source: Cate Gillon/Getty Images

No, the Big Mac did not double in price

McDonald's has faced a situation similar to that of gasoline prices, after a picture of an $18 Big Mac meal went viral. That image was real — but it's also an outlier.

"Recently, we have seen viral social posts and poorly sourced reports that McDonald’s has raised prices significantly beyond inflationary rates. This is inaccurate," Erlinger wrote.

"And 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."

He acknowledged the viral image but also provided context.

"I can tell you that it frustrates and worries me, and many of our franchisees, when I hear about an $18 Big Mac meal being sold — even if it was at one location in the U.S. out of more than 13,700," he added.

"More worrying, though, is when people believe that this is the rule and not the exception, or when folks start to suggest that the prices of a Big Mac have risen 100% since 2019."

The McDonald's brand president explained that the price for his chain's signature sandwich has gone up but not anywhere close to 100%.

"The average price of a Big Mac in the U.S. was $4.39 in 2019. Despite a global pandemic and historic rises in supply-chain costs, wages, and other inflationary pressures in the years that followed, the average cost is now $5.29. That’s an increase of 21% (not 100%)," he wrote.

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McDonald's takes steps to keep prices down

It's important to note that McDonald's does not set prices at its restaurants.

"Our franchisees (who own and operate more than 95% of all restaurants in the U.S.) set menu prices for their restaurants, which account for the increased costs of running their businesses," he noted. "In doing so, they work hard to minimize the impact of price increases on our fans. This includes the everyday prices on our restaurant menu boards to special limited-time offers."

A restaurant operating in California, where fast-food workers now make at least $20 per hour, or one with higher costs because it's in a remote location, might charge more. In a broad way, however, Erlinger stands by McDonald's' pricing compared with that of its rivals.

More Restaurants:

"Many of our menu items have risen less than the rate of inflation — and remain well within the range of other quick-service restaurants. It’s also why more than 90% of U.S. franchisees are offering meal bundles for $4 or less," he added.

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The McDonald's president also wanted to make clear to customers that the chain understands the need to deliver value.

"I fully expect the prices at your local McDonald’s to be an area of conversation and focus in the coming months," he wrote.

"As it does, I hope you’ll see the programs we’re launching nationally and locally as meaningful to you. At the same time, I hope it’s helpful to see some of the common myths that I’ve encountered, and the facts that go along with them."