Recently, news of McDonald's price increase has been circulating. On December 27th, a reporter from Dahe Finance Cube noticed that some of McDonald's ordering platforms have already raised prices for their meals.
The reporter called the official customer service of McDonald's to further confirm, and their staff stated that starting from December 27th, the prices of some individual products and packages at McDonald's will be confirmed and adjusted, and the prices will be announced through various ordering channels. Moreover, this price increase will be adjusted based on the evaluation of changes in operating costs.
Subsequently, the reporter visited several McDonald's stores in Shenzhen and noticed that some of the food prices in the stores had been raised. In addition, the reporter called McDonald's stores in Beijing, Shanghai, Henan and other places to learn that local food prices have also increased, with an overall price increase range of about 0.3 yuan to 1 yuan.
At the end of the year, this is also McDonald's second price increase in 2023. However, the "1+1" optional package, which was raised by 1 yuan in January this year, will remain unchanged in this round of price increases.
McDonald's restaurants in multiple locations have raised prices of some dishes by 0.3 yuan to 1 yuan
On December 27th, the reporter noticed through the McDonald's ordering platform that some meal prices have increased. A netizen from Guangzhou said that the full score combination of pork, willow, egg, and wheat for breakfast has increased from 11.4 yuan to 11.7 yuan, an increase of 0.3 yuan. Some netizens have also expressed that their Jishi Egg Wheat full score combination has increased from 6 yuan to 6.6 yuan, and the price increase in different stores is not consistent.
Subsequently, the reporter called McDonald's official customer service to confirm the price increase. The staff said that starting from December 27th, McDonald's confirmed the price increase, and some individual and package prices will be adjusted. The specific prices will be clearly marked on the ordering channel, and the price increase will be adjusted after evaluation based on changes in operating costs. At the same time, the staff member also stated that McDonald's currently has many great value options, including the "1+1" casual pairing for 13.9 yuan, Hi Flip Monday, a 40% discount breakfast card, and the recently launched designated package for the second half price.
Subsequently, the reporter visited McDonald's stores located on Xinzhou 9th Street and Macheng Square in Shenzhen, and their staff all stated that some meal prices have been increased, such as the price increase of 0.5 to 1 yuan for some dishes in Macheng Times Square. Moreover, the price increase for different dishes in the stores varies, and the actual price can be confirmed by users through the ordering platform. In addition, the reporter called to learn that some McDonald's stores in Beijing, Shanghai, and Henan have also raised prices for their meals. The price increase varies depending on the food and the location of the store, with an overall adjustment range of 0.3 yuan to 1 yuan.
Among them, the prices of snacks and hamburgers at McDonald's stores in Shanghai Square have increased by 0.5 yuan to 1 yuan, and there has been no further adjustment for the time being; The McDonald's store at Beijing Daxing International Airport has increased the price of a 4-piece set by 1 yuan, and the breakfast package has increased by 0.5 yuan; The McDonald's store on Tongtai Road in Zhengzhou has adjusted prices for both breakfast and main meals, with breakfast prices ranging from 0.3 yuan to 1 yuan.
In fact, this is not the first time McDonald's has raised prices this year. In January of this year, the price of its "1+1" optional package increased from 12.9 yuan to 13.9 yuan. At that time, McDonald's had responded that due to the continuous impact of the epidemic on various costs, starting from January 4, 2023, McDonald's dine in and McLaren's individual and package prices have been adjusted.
From McDonald's performance this year, the price increase strategy has indeed increased its sales, but it has also brought pressure to consumers. According to McDonald's financial report for the third quarter of this year, its revenue was 6.69 billion US dollars, a year-on-year increase of 14%; Net profit was 2.3 billion US dollars, a year-on-year increase of 17%. In terms of sales, McDonald's global comparable sales increased by 8.8% in the third quarter, while its comparable sales in the United States increased by 8.1%. At the same time, customer traffic also decreased.
Chinese food industry analyst Zhu Danpeng said in an interview with Dahe Finance Cube reporter, "McDonald's has already achieved brand and scale effects. Currently, the cost of the entire food and catering supply chain is on the rise. From this perspective, McDonald's price increase should be based on alleviating its cost pressure, but this move cannot completely solve its cost pressure."
McDonald's Global CEO: Can open 25000 stores in China
In McDonald's business strategy, in addition to price increase strategy, there is also its accelerated store expansion strategy that has attracted market attention. At the recent McDonald's strategic update meeting, McDonald's announced that it will expand the number of restaurants to 50000 by the end of 2027. As of September 30th this year, it has a total of 41198 chain stores worldwide, which is nearly 10000 stores away from its target.
Among them, China, as the world's second largest and fastest growing market for McDonald's, plays an important role in store expansion. As of September 30th, the number of McDonald's China system restaurants was 5582, a net increase of 677 within a year. In the third quarter of this year, the same store sales in international franchise markets, including China and Japan, increased by 10.5% year-on-year.
Chris Kempczinski, the global CEO of McDonald's, pointed out that based on the penetration rates of McDonald's other markets, the Chinese market appears to have "no reason not to open 20000 to 25000 stores.".
Regarding McDonald's performance in the Chinese market, Zhang Jiayin, CEO of McDonald's China, has pointed out that the company's sales and overall growth in the first half of the year far exceeded pre pandemic levels, thanks to the growth in same store sales and the increase in new stores. The urbanization process in China will continue to accelerate in the next five years, which means broader development space for McDonald's China.
Recently, Carlyle Group cleared all its 28% equity stake in McDonald's China, with the recipient being McDonald's Global. The transaction is expected to be completed in the first quarter of 2024, at which point McDonald's Global shareholding will increase to 48%.
"Overall, as the most important overseas market for McDonald's, China has accelerated its overall decision-making and localized operations since its independent operation. The increase in equity holdings also indicates McDonald's global confidence in the Chinese market. Currently, the acceleration of McDonald's stores in the Chinese market should be based on the domestic development situation in conjunction with its global strategy," said Zhu Danpeng.
It is worth mentioning that McDonald's has used "digitalization" as a powerful lever in its store expansion strategy. According to Zhang Jiayin's introduction, McDonald's China's next digital focus will be on serving registered members, expanding digital channels, and accurately reaching new customer groups.
