McDouble The Price: McDonalds meals no longer make us happy

Fancy a mayo chicken for 99p? You’ll have a hard time getting one today. It used to be McDonald’s tagline, but price rises mean customers of the fast food chain have had to wave goodbye to many of its best-known super cheap deals.

The hike in prices is having an impact on McDonald’s profits, however. This week, the McNugget maker announced global sales had fallen for the first time since the pandemic in 2024 Q2, as the cost of living crisis makes consumers hungry for cheaper food items.

Many restaurants and cafes have had to increase their prices to cope with steeper food and energy costs. But Maccies have marked up many of the meals by more than the rate of inflation. Below, we reveal how much its favourite menu items have risen by, on average.

Saver menu?

McDonald’s previously had a reputation as a restaurant chain that offered great value for money. However, the business has raised its prices several times over the past few years. In 2022, it jacked up charges for some of its breakfast meals, large coffees, and share boxes.

Last year, it again dialled up costs for consumers on some of its most popular menu items. Here’s how much prices rose across McDonald’s 1,450 UK restaurants in 2023, on average:

In 2023, the average rate of inflation was 10.1%. That means the price of a Mayo Chicken burger, one of McDonald’s cheapest ‘saver’ food items, rose by double the rate of inflation.

The pace of change at the fast food outlet is unaffordable for many families, and McDonald’s is now also feeling the pinch. The company saw global sales decline by 1% over the April-June period compared with a year earlier, marking its first profit fall since the 2020.

In response, managing director at McDonald’s, Chris Kempczinski said the firm would undergo a “comprehensive rethink” of its pricing.

UnHappy Meal

Fans of Maccy D’s have been vocal about their dissatisfaction with the brand’s surging prices. Restaurant-goers in the US are particularly sour, where the average menu item at McDonald’s now costs 40% more than it did in 2019.

In an open letter, Joe Erlinger, president of McDonald’s USA, hit back at criticisms that the chain had doubled its prices in the last five years. He said the cost of a Big Mac meal had increased by 27% from 2019. However, the price of medium french fries has grown by 44%.

McDonald’s is not the only restaurant to raise its prices. KFC has also come under fire for cost increases. A bucket for one at the Kentucky Fried fast food chain now costs almost £10.

Meanwhile, Wendy’s, another burger chain, suggested it would introduce dynamic pricing to match prices to customer demand. The brand was forced to backtrack after online outrage.

Alongside rising supply chain costs, another contributing factor to the sales crisis in the UK has been the newly-introduced minimum wage. In April, the national living wage was raised to £11.44 per hour, causing staffing costs at restaurants to swell.

That some of the world’s biggest food outlets are struggling to absorb the increase is testament to the crippled financial condition of today’s hospitality sector.

McDonald’s sales fall is good news for SMEs

With inflation largely outpacing wage growth for Brits, consumer appetite for value has been driving food and drink trends this year. But cash-strapped companies are struggling to service the demand without compromising cash flow.

Whether to increase prices in line with inflation is a dilemma facing every SME owner. Many are desperately trying to avoid the move. Last year, a survey found that while 70% of hospitality firms saw prices rise in April 2023, just 30% increased their own fees.

Still, as customers turn away from the bigger chains, there is an opportunity for local firms to scoop up ex-Maccies without having to slash profit targets. Building a reputation in your surrounding area for reliable service that is able to surprise and delight customers will help you to build consumer loyalty faster than a large, faceless franchise.

Agile small businesses also typically have more freedom to make last-minute cost changes. They may engage in strategic price rises, using customer insights and marketing trends.

During the recent UEFA Euros football championship, for example, around 6% of UK pubs and bars raised the price of a pint by 30p. At 33 taprooms, charges rose by over 80p.