Caixin News Agency | New Consumer Daily, December 26th (Researcher Liang Youyun): Recently, a netizen revealed on social media that from December 27th, nearly 90% of McDonald's hamburgers and snack products will increase in price by 0.5 yuan, and related packages will also increase in price by 1 yuan. The "1+1" package, which has been continuously increasing in price before, is temporarily not subject to price increase this time.
As one of the most well-known fast food brands in China, the topic of McDonald's price increase has quickly sparked heated discussions among netizens. Some netizens expressed dissatisfaction that while raising prices, they should also focus on improving taste and quantity, otherwise consumers will turn to other brands. Some netizens also expressed that it doesn't matter, the price increase of 0.5-1 yuan will not actually have a significant impact on ordering choices.
Regarding the price increase controversy, McDonald's customer service confirmed the news of the price increase on December 27th. According to customer service, the company will regularly evaluate and adjust its price structure in light of changes in operating costs. In the near future, some individual items and packages will begin to be adjusted, with clear pricing and public announcement in various ordering channels. However, we have not received any notification indicating which specific items and packages will be subject to price adjustments.
In fact, the controversy over McDonald's product prices sparked significant negative public opinion in November this year. Some netizens have revealed that the milk sold at McDonald's stores at a price of 23 yuan per cup is simply a "cut leek" made by heating affordable pure milk and filling it into the cup at the entrance store. McDonald's has also responded by stating that hot milk is priced uniformly, and prices at train station stores will be slightly higher.
According to a review by New Consumer Daily, McDonald's China has raised prices every late December in the past three years.
According to reports, at the end of December 2021, McDonald's China quietly increased the price of the "1+1" package from 12 yuan to 12.9 yuan. During the same period, the prices of some individual hamburgers and snacks also slightly increased, but the overall impact was not significant. However, McDonald's silent price increase has still caused heated discussions and dissatisfaction among consumers.
At the end of December 2022, McDonald's flagship low-priced "1+1" package increased by 1 yuan, rising to 13.9 yuan. At the same time, some of McDonald's products have also increased in price by 0.5-1 yuan.
In all previous price increases, McDonald's explanations have been related to changes in raw materials and operating costs. The New Consumer Daily also consulted McDonald's regarding this matter, but as of the time of publication, they have not responded.
McDonald's Q3 2023 performance report shows that the company achieved a revenue of 6.692 billion US dollars, a year-on-year increase of 14%; Net profit was 2.317 billion US dollars, a year-on-year increase of 17%. Specifically in the Chinese market, McDonald's has 5582 Chinese restaurant stores, nearly half of which are located in third - and fourth tier cities. It is worth noting that although McDonald's same store sales in China increased by 10.5%, the growth rate was slightly lower than the same period in 2022.
According to Zhang Jiayin, former CEO of McDonald's China, since the offline economic recovery in 2023, McDonald's sales growth has far exceeded before the epidemic, and it has planned to open over 900 stores in China by 2023. As of the third quarter of 2022, McDonald's China had a net increase of 677 stores year-on-year.
According to the plan, by 2028, the scale of McDonald's stores in China will exceed 10000, covering first and fifth tier cities in China.
Faced with the increasing preference of Chinese consumers for cost-effectiveness, McDonald's CFO Ian Borden revealed at a previous financial report that McDonald's has launched a hamburger package promotion to boost consumer demand, which has also increased the company's market share in beef related products.
With the continuous increase in product prices, although some McDonald's packages and products have not exceeded the affordable range, an increasing number of price sensitive consumer groups have chosen cheaper Chinese style hamburger and fried chicken brands, such as Wallace, Tasting, etc.
Since the beginning of this year, many Chinese hamburger brands in China have also received capital attention. According to incomplete statistics from Caixin News Venture Capital, from early 2023 to November 2023, a total of 6 Chinese hamburger brands in China were invested, including Limburg Burger, Madas, Running Panda, Licking Zhi Flavor Chinese Burger, Sharon Forrest Gump, and Kenweiting.
Among them, "Running Panda" received a single investment amount of hundreds of millions of yuan, making it the largest financing scale of its kind this year; "Kenweiting" has received two consecutive votes in recent times. In addition, "Sharon Forrest Gump" received 10 million yuan from investment institutions under Naixue, attracting industry attention.
The most popular Chinese hamburger brand this year, "Tasting," is also rumored to be about to receive investment in the near future, and the financing scale is large, and it is in the final negotiation period. According to data, the brand was founded in 2012 and transitioned to selling "Chinese style burgers+pizzas" in 2017, quickly achieving great success.
According to data from Narrow Door Meal Eye, as of the end of December 2023, Tastin has a total of 6619 stores nationwide, mainly covering new first tier, second tier, and third tier cities, with an average per capita consumption of 16.5 yuan. With the expansion of scale, Tastings will gradually advance towards county towns and first tier big cities in 2023.