In the past two days, the highly anticipated McDonald's price increase has finally settled the dust. Yesterday, the relevant person in charge of McDonald's China responded to Guangzhou Daily's full media reporter that McDonald's China has adjusted some product prices starting from December 27th, with an average increase of about 3%, and has clearly marked prices in various ordering channels.
The reporter investigated the market and found that McDonald's breakfast, main meals, snacks and other products have indeed increased in price, with a range of about 0.5 yuan to 2 yuan.
Market reaction: Some consumers claim that the increase is acceptable
The reporter learned through the McDonald's app that the full price of a single breakfast item, Jishi Egg Wheat, has increased from 8.5 yuan to 9 yuan. McDonald's popular main menu items, BBQ Chicken Leg Burger and BBQ Chicken Leg Burger combo, have all been priced up by 0.5 yuan. The four piece set of Mai La Chicken Leg Burger (exclusive to O McKinley) has been priced up by 1.5 yuan, and the snack, Mai Le Chicken nuggets, has also been priced up by 0.5 yuan. Consumers are comforted that although the price has already increased once at the beginning of this year, the popular "high cost performance package" 1+1 casual pairing has not continued to increase in price, still at 13.9 yuan.
Some netizens said that after purchasing a breakfast card, the full score set meal of Jishi Egg Wheat was 5.4 yuan, but now it has been 6.6 yuan. Compared with KFC, from 2020 to now, the two piece set of Panini and soybean milk is still 5.4 yuan. McDonald's has raised prices, but KFC has not yet taken any action to raise prices. Will consumers withdraw from "Maimen" and switch to "K-Men"? Consumer Xiao Liu believes that although he does not want a price increase, McDonald's can accept a 0.5 yuan or 1 yuan increase. Currently, he still believes that McDonald's and KFC can eat whichever is closer. McDonald's enthusiast Xiao Wang believes that even after the price increase, McDonald's will still eat McDonald's because McDonald's burgers and fries are more delicious than KFC, especially French fries.
Reason for price increase: Changes in operating costs
Why did the price increase? McDonald's China's response has already given the answer: considering recent changes in operating costs. Chinese food industry analyst Zhu Danpeng believes that the cost of the entire food and catering supply chain is currently rising, and the increase in management costs and personnel has also brought cost pressure. Especially with McDonald's accelerating store expansion in China, the significant increase in operating costs is also within a reasonable range. According to the third quarter financial report of 2023, as of September 30, the number of McDonald's China system restaurants was 5582, compared to 4905 in the same period of 2022, with a net increase of 677 in one year.
Pan Helin, co-director and researcher of the Digital Economy and Financial Innovation Research Center at the International Business School of Zhejiang University, believes that McDonald's growth rate is reasonable overall. Although the inflation rate has not shown signs, many fast-moving consumer goods have been raising prices this year, such as Kangshifu raising the suggested retail prices of tea and fruit juice series products.
Zhu Danpeng also analyzed that in the current context where many catering enterprises may not dare to raise prices, McDonald's still dares to raise prices, indicating that it has a certain level of confidence in brand and scale effects. Zhu Danpeng also pointed out that McDonald's has upgraded its service system and provided consumers with various discount options on social media platforms. "These measures are believed to be very helpful in improving customer loyalty," he said
Industry insiders have pointed out that while companies are raising product prices, they need to ensure high-quality catering services to provide consumers with a better experience. On the other hand, they should continue to implement measures such as refined management to further "digest" the pressure of rising operating costs and reduce product growth.
It is worth noting that shortly before McDonald's price increase, on November 20th, McDonald's Global announced its agreement to acquire a minority stake in Carlyle's strategic partnerships in mainland China, Hong Kong, and Macau. After the transaction is completed, CITIC consortium will continue to hold 52% of the shares, and McDonald's Global, as a minority shareholder, will increase its shareholding from 20% to 48%.
Regarding this, Zhu Danpeng analyzed that the increase in McDonald's equity holdings shows confidence in the Chinese market. This top-level design change will enhance McDonald's global autonomy in terms of operating and decision-making power in the Chinese market, resulting in significant gains in overall cost reduction and efficiency improvement, as well as matching and meeting the core needs of the local market.