Are McDonald's Prices About To Get Even Higher?
Food prices are rising. Again. Part of the reason this food inflation crisis is so concerning is that it touches more than just your grocery bill. The ripple effect reaches out into everything food-related. Even low-cost retailers are feeling the crunch. The popular dollar store, Dollar Tree, has even had to raise its prices to $1.25. And after months and months of steady inflation, the squeeze is beginning to include your favorite eateries. McDonald's says that these inflation-led price increases could be a driving force behind their recent sales growth (via Bloomberg). A little scary, right?
McDonald's prices certainly reflect the current dismal times, as they have increased a staggering 8% between January and the end of March 2022 (via Restaurant Dive). And many customers are worried that McNugget prices will continue to hike as the year goes on. But is that fear valid? And is McDonald's raising their prices during a time of inflation simply because they know they can get away with it?
Can McDonald's keep some of its menu items on the lower side?
While McDonald's is probably not price gouging, it does seem likely that prices may increase further this year, at least on some menu items. The fast food chain says they're projecting "12% to 14% inflation for food and packaging [they use] in the U.S. and even higher levels in Europe," (per CNBC). This could mean higher prices for a Big Mac Meal down the line.
Interestingly, McDonald's did not raise its prices across the board — the value menu remains the same value and they've even been able to maintain some items at their long-time $1 price (via McDonald's). This trend is likely to continue, as the items that have seen the most inflation form the backbone of Mickey D's main menu. While potatoes have remained fairly stable, meat, poultry, fish, and eggs have seen the highest rates of inflation of any food items. That would be Big Macs, McNuggets, Filet-O-Fish sandwiches, and yes, Egg McMuffins too. Unfortunately, eggs are one food that's seen the greatest price increase from inflation. According to the U.S. Bureau of Labor Statistics, the price of a dozen eggs is just a few cents shy of its all-time high, which took place during the 2008 recession and capped out at $2.97.
The chain has made a statement about its intent to employ "frequent but smaller" price increases to offset inflation (via Market Watch). Prices may continue to rise, but they won't be as jarring (hopefully) as the 8% hike we saw this past spring.