Starting from December 27th, nearly 90% of McDonald's hamburgers and snack products have increased in price by 0.5 yuan, and related packages have also increased in price by 1 yuan. As one of the most widely known fast food brands in China, the topic of McDonald's price rise has quickly aroused netizens' heated discussion, and netizens have roast that it is selling more and more expensive, but the quantity is smaller and smaller.
At the same time, McDonald's is entering the fastest period of store expansion in brand history in the Chinese market, moving towards its goal of breaking through 10000 restaurants by 2028. According to this plan, McDonald's China will have an annual opening of 1000 stores in the future, with an average of one new store opening every nine hours. However, in the more price sensitive sinking market, the higher priced "foreign fast food" brands do not have an advantage when facing the already established scale of Wallace and Tustin.
Claiming an average increase of about 3% in operating cost changes
On the morning of December 27th, McDonald's stores announced that they had started raising prices, with some individual items and packages increasing by 0.5 to 1 yuan. Members can enjoy member discounts on the basis of the price increase. In the McDonald's mini program, it can be found that compared to December 25th, multiple packages and single items at McDonald's have seen price increases. For example, multiple O-Mac membership packages have all increased in price by 1 yuan.
The Wuba set menu, Mai La Chicken Leg Burger set menu, Braised Chicken Leg Burger set menu, Mai Xiang Chicken set menu, Double layered Deep Sea Codfish Burger set menu, and Angus MAX Thick Cow Burger series set menu all saw price increases of 0.5 to 2 yuan, while French fries and crispy French fries also increased by 0.5 to 1 yuan compared to before. Multiple "O MacKing" membership packages are 1 yuan more expensive than before.
Regarding the reasons for the price adjustment, McDonald's stated that "taking into account changes in operating costs, we regularly evaluate and adjust the price structure," with an average increase of about 3%.
Data shows that in the past three years, McDonald's China has raised prices every late December.
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.
Hamburgers are getting smaller and smaller, but are you willing to raise the price?
The entry "McDonald's price increase" has surged on Weibo's hot search. Under related topics, some netizens expressed that "Lao Mai, your small step up is a big step for me to upgrade my consumption"; Some netizens also said, "Hurry up the price, I don't want to eat anymore." "I really watched the three piece set rise from the initial 15 yuan to its current price.".
Some netizens believe that "go up, anyway I can't eat it once a year. I usually eat tastings", "I choose tastings Wallace", "McDonald's has raised prices, so has KFC raised prices?" Some netizens have launched a marketing campaign for Burger King's "9.9 yuan two burger combo", and some even exclaimed, "tastings, go up!"
In addition, McDonald's is also using various means to indirectly raise prices in areas that consumers find difficult to notice. Many netizens have reported on social media that McDonald's burgers are getting smaller, and some stores have even cancelled the process of wrapping fried chicken in powder.
Some netizens said, "The hamburger is getting smaller and smaller, so why bother raising its price like an Oreo?" "It's possible to raise it a bit, but the Big Mac can't be smaller anymore.".
Last month, roast about the "sky high price" of milk
This is not the first time McDonald's has sparked discussions due to price issues. Just last month, McDonald's made it to the Weibo hot search for "23 yuan per glass of milk".
In mid November, a netizen complained that a glass of hot milk from McDonald's was 23 yuan, saying that he was "scared by the sky high price of milk". It's not surprising that netizens were scared. You should know that in supermarkets and convenience stores, the price of a 250ml bottle of fresh milk is usually around 10 yuan, and some boxed fresh milk even costs only three to four yuan.
On the official McDonald's mini program, this milk is available for sale in multiple McDonald's stores in Beijing. Among them, at McDonald's Beijing Fengtai Qiaonan Branch, there are three sizes of milk available for sale: small cup, medium cup, and large cup, with corresponding prices of 15 yuan, 19 yuan, and 23 yuan, respectively. The prices of ice milk and hot milk are the same.
On the mini program, McDonald's called this milk a "strictly controlled high-quality milk product, freshly steamed.".
However, when the media called the store as a consumer, the relevant staff stated that this milk was made with three yuan fresh milk and only heated by a machine.
As for why it sells so expensive, the staff member said, "This is a unified pricing. All McDonald's hot milk is priced at this price."
McDonald's China market slowdown in growth rate
According to official website information, McDonald's entered the mainland Chinese market in 1990 and opened the first McDonald's restaurant in mainland China (now McDonald's Shenzhen Guanghua Restaurant) on Dongmen Commercial Pedestrian Street in Luohu District, Shenzhen, Guangdong Province. At present, mainland China has become McDonald's second largest market in the world, the fastest growing market in the world, and the largest franchise market outside of the United States.
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.
Attacking 10000 store targets and facing price challenges
McDonald's China has proposed to open 10000 chain stores in the Chinese market by 2028. With the promotion of price increases, achieving the goal of ten thousand stores may require more effort.
Compared to McDonald's, which is constantly raising prices, in order to cope with changes in the macro environment and attract a wider user base in the sinking market, KFC has launched a low-priced "pancake burger" with a package price of 19.9 yuan; At the same time, Pizzahut continues to enrich pizza products below 50 yuan. In addition, local fast food brands such as Hua Lai Shi and Tastin have formed a scale and continuously launched "Chinese style burgers" that are in line with the Chinese stomach. In this context, the rising prices of "foreign fast food" brands do not have an absolute advantage.
The slowdown in market demand caused by the decline in consumer willingness is effectively affecting the operation of chain brands. In the future, McDonald's will inevitably face the challenge of competing in the sinking market in the same industry as it expands.
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