McDonald’s, on Monday, reported a remarkable 14% increase in revenue for the latest quarter. The surge was attributed to strategic menu price increases.
The Golden Arches brought in a total revenue of $6.69 billion for the three months ending on September 30, surpassing the expectations of $6.58 billion set by Refinitiv analysts.
Price Increases Unveiled
However, McDonald’s did not disclose the precise extent of the price increases, which generally varied between locations.
Surprisingly, according to the New York Post, one McDonald’s branch in Darien, Conn., charged as much as $18 for a Big Mac combo meal, while a McDonald’s in Times Square offered the same combo for $13.69.
McDonald’s stock prices closed with a 1.7% increase, reaching $260.15.
Soaring Net Income
The net income for McDonald’s rose to $2.3 billion, a substantial increase from the $1.98 billion reported for the same period the previous year.
US Same-Store Sales Surge
Same-store sales in the U.S. saw an impressive increase of 8.1%, thanks to the strategic price hikes.
Confirmation from CFO
During an earnings call with investors, CFO Ian Borden confirmed that the company’s prices had increased during the third quarter.
Although he didn’t specify the exact percentage, he indicated that McDonald’s anticipated an annual price increase of just over 10% for the year.
Despite the company’s optimism, many consumers expressed dissatisfaction with the rising prices, claiming that fast food is no longer as affordable as it once was.
Consumers noted that the “$1 $2 $3” menu in the McDonald’s app in New York City didn’t feature anything for $1 or $2, with the cheapest option being a small order of fries for $2.49.
Franchise Fee Increase
McDonald’s recently announced that franchisees opening new locations in 2024 would face an increased royalty fee of 5%, the first such increase in nearly three decades.
The increased royalty fees would only affect new franchisees, buyers of company-owned restaurants, and relocated restaurants, leaving existing franchisees unaffected.
CosMc’s and Grimace’s Success
Following a successful campaign featuring the McDonaldland character Grimace, the company announced plans to create a spinoff chain of smaller restaurants called CosMc’s in 2024.
An Enigmatic Addition
CosMc is a yellow-colored, part-alien, part-robot character from McDonaldland, but how it fits into the new brand remains a mystery.
Streamlining and Restructuring
Despite the impressive earnings, McDonald’s undertook measures to streamline its operations, including laying off hundreds of corporate workers and changing pay and benefits to improve innovation and decision-making.
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The post A McRipOff? McDonald’s Faces Backlash as Prices Skyrocket – Is Fast Food No Longer Affordable? first appeared on Wealthy Living.
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