McDonald’s has reported a 14% increase in revenue for the latest quarter, citing “strategic menu price increases” as the driving force behind this surge. The fast-food giant generated a total of $6.69 billion in revenue for the quarter ending on September 30, surpassing analyst expectations of $6.58 billion, as per Refinitiv data.
While the specific details of the price increases were not disclosed, McDonald’s confirmed that prices had indeed risen in the U.S. during the third quarter. CFO Ian Borden stated that the company anticipates a menu price increase of just over 10% for the full year, marking the second consecutive year with a 10% price hike.
The impact of these price increases varies across McDonald’s locations, with one branch in Darien, Conn., charging as much as $18 for a Big Mac combo meal, while a similar combo costs $13.69 in Times Square.
The report also highlighted that some consumers are finding fast food to be increasingly expensive, with Reddit users expressing concerns about the rising costs of items that were once considered affordable. The sentiment is that prices for fast-food items have reached a level where they are no longer considered a good value.
McDonald’s did not specify the magnitude of these menu price changes, but it appears that the company is actively addressing concerns about inflation and the rising cost of doing business. It’s important to note that price increases can vary depending on location, and the impact on consumers may vary as well.
Despite the price increases, McDonald’s continues to perform well financially, beating revenue expectations. This success is partly attributed to strategic menu pricing. The fast-food giant is actively adapting to the changing economic landscape, with ongoing efforts to balance its pricing strategies and maintain customer satisfaction.
The report underscores how McDonald’s, like many businesses, is navigating economic challenges, including rising inflation, by adjusting menu prices and responding to shifting consumer perceptions of value in the fast-food industry.
The fast-food chain @McDonalds #rose 1.75% after posting an 8.8% increase in global same-store sales and a 14% rise in revenue thanks to price hikes. #stocks #earnings #Q3 🍟📈
— FlowBank (@FlowBank_SA) October 31, 2023
