Yahoo Finance McDonald's top US exec denounces viral reports of runaway prices
By Waylon Cunningham
(Reuters) - McDonald's top U.S. executive denounced viral reports of runaway Big Mac prices as painting an inaccurate picture of the company, which has seen its profits surge by roughly a third since 2019 and is now preparing to roll out $5 combo meals.
"I can tell you that it frustrates and worries me, and many of our franchisees, when I hear about an $18 Big Mac meal being sold," said McDonald's USA President Joe Erlinger in an open letter published on the burger giant's website on Wednesday.
"More worrying, though, is when people believe that this is the rule and not the exception, or when folks start to suggest that the prices of a Big Mac have risen 100% since 2019."
McDonald's profits have increased by almost a third between 2019 and 2023. McDonald's gross profit in 2023 was slightly more than $14.56 billion. In 2019, it was nearly $11.18 billion.
McDonald's has in recent months emphasized itself as a value brand. This month the company confirmed it would roll out a $5 combo meal for a limited time this summer.
Prices at McDonald's are set by franchisees, which run 95% of the company's more than 13,700 stores in the U.S., according to the company. The $18 Big Mac, widely reported in the media, was sold at a franchised store in Darien, Connecticut, a town where the median household income is more than $250,000, according to U.S. Census Bureau figures from 2021.
Erlinger said the average price of a Big Mac in the U.S. is $5.29, up 21% since 2019, as opposed to far larger increases suggested by "poorly sourced" reports.
An infographic accompanying the letter cited "myths" attributed to, among others, social media posts and an article in the Minneapolis Star Tribune newspaper.
Erlinger said McDonald's built its brand on affordability and is "committed to living up to that legacy — especially at a time when our customers need it most."
McDonald's and other fast food restaurants with reputations for meals working people can afford have recently been targeted by people complaining about inflation and "greedflation" in the U.S.
In February, hamburger chain Wendy's sparked a social media firestorm after its CEO said in a call with investors that the chain would experiment with "dynamic pricing." Critics took the comment to suggest surge pricing often associated with airlines and the ride-hailing service Uber. Wendy's said that interpretation was inaccurate.
Bank of America, in an investor note, said it thinks menu pricing at McDonald's "needs to moderate." McDonald's pricing, which it pegged as up 20% since 2022, had increased more than competitors like Wendy's (15%) and Burger King (16% at one franchisee).
(Reporting by Waylon Cunningham; Editing by David Gregorio)
