McDonald’s anticipates that the cost of its fan favorite food will increase later in the year. Executives are blaming Inflation risingOther costs. Kevin Ozan, chief financial officer, informed investors that on January 27, the company faced a number of challenges. “some pressure certainly”Reports the increase in prices Wall Street Journal. The company must balance the increased prices while still offering customers the same great value that the world’s biggest fast food chain offers.
While the coronavirus pandemic continues, and some markets are reimposing restrictions, the company’s prices have already gone up. According to executives, these issues have created uncertainty and caused shortages in labor and supply chain issues around the world. McDonald’s had to increase menu prices and pay higher wages in order to attract workers and to deal with the rising cost of key ingredients such as meat and vegetable oils.
Revenue has already increased due to higher prices. The fourth quarter ended December 31 and the company reported a 7.5% rise in same-store sales. McDonald’s also attributed the increase in sales to new products like the McRib and fried chicken sandwiches.
Chris Kempczinski, CEO of the company, stated that restaurants still operate for 10% less hours due to the pandemic as well as a shortage in staffing. The Wall Street Journal reports that Kempczinski was quoted as saying that the company continues to see restaurants operating for 10% less time because of the short staffing and the shortstaffed. In comparison to 2020, drive-through service has also been slower. Around 20% of U.S. restaurant still have closed dining areas. Kempczinski said that employees are starting to increase as McDonald’s franchisees and McDonald’s increased wages by more then 10% in 2021. The average cost of menu items has increased by 6% over the previous year.
According to the report, McDonald’s failed to meet Wall Street’s forecast revenue growth. New York Post. Although sales rose 13% to $6.01 Billion, this was still lower than the $6.03 Billion expected. The total digital sales in 2021 reached $18 billion, 16% of global total sales. CNBC.
McDonald’s marketing team continues to innovate with new ideas. The company launched a limited-time promotion late last month. “hacks”Customers could select from a menu that offered several options for meals. One meal is called the Land, Air & Sea, which includes a Big Mac, Filet-O-Fish, and McChicken sandwich, which customers are then encouraged to smash together for one mega meal. Other options include Crunchy Double, Hash Brown McMuffin and Surf + Turf. You can order the meals only through McDonald’s.