Three U.S. senators are pressing McDonald’s for more information about the burger giant’s pricing decisions in recent years.
In a letter to CEO Chris Kempcinzski on Tuesday, Democrats Elizabeth Warren, Bob Casey and Ron Wyden accused the chain of raising prices higher than necessary and using the profits to enrich itself and its shareholders.
“While McDonald’s is not the only fast-food restaurant that has increased prices significantly in recent years, its dominant market position as the largest fast food chain in the United States has an outsize impact on American consumers,” the senators wrote. “While working families are trying to make ends meet, McDonald’s and its corporate counterparts have continued to grow their profits.”
The senators said that while overall inflation has risen 20% since 2020, McDonald’s prices have gone up substantially faster, while its net annual income increased by over 79% from 2020 to 2023. They want to know why its prices have risen so much.
McDonald's said in a statement that the letter "demonstrates a lack of understanding of our franchise business model and contains contortions of facts and many inaccuracies." It noted that the components of its new $5 meal deal featuring a McChicken would have cost 15% more in 2020, for instance.
“McDonald’s and our franchisees are committed to keeping prices affordable – from the everyday prices on our menu boards, to our popular $5 Meal Deal and other offers available locally or on the App," the company said. "We will respond to the letter, and in the meantime, continue to show up for our customers and our communities.”
Restaurants of all kinds have raised prices to help offset the rising costs of labor and food since the pandemic. Overall, food-away-from-home prices have risen about 25% since 2020. This has led to traffic challenges at many restaurants as many consumers become more careful with their spending.
McDonald’s, the nation’s biggest restaurant chain and one known for value, has faced particular scrutiny over prices. Following inaccurate reports that the price of a Big Mac had risen by 100% since 2019, McDonald’s U.S. President Joe Erlinger in May took the rare step of publishing an open letter to customers in an effort to set things straight.
He wrote that the average price of a Big Mac has gone from $4.39 in 2019 to $5.29 earlier this year, an increase of 21%.
In a separate fact sheet, McDonald’s said claims that it had raised prices two times as fast as inflation were false.
Its price increases, it said, are closely tied to the costs of running its restaurants. Its biggest costs—food and labor—are up about 40% since 2019, it said, and its average menu prices have risen at about the same rate.
McDonald’s prices are set by franchisees, who operate 95% of the chain’s restaurants, and can vary widely from place to place.
Higher prices have had an impact on the chain’s business. Last quarter, same-store sales fell 0.7%, a rarity for the brand. This summer, McDonald’s introduced a $5 meal bundle to appeal to price-conscious customers, and it has made other efforts to get customers in the door, such as the recently launched Chicken Big Mac.
The senators’ inquiry landed during a tumultuous week for McDonald’s. Also on Tuesday, the chain was linked to an E. coli outbreak that has sickened nearly 49 people, killing one. The day before, the brand was drawn into the midst of a heated presidential campaign after Donald Trump worked the fry station at a Pennsylvania location on Sunday.
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