Remember not too long ago how you used to be able to get a Big Mac and fries at McDonald’s for just a few bucks?
If you’ve been to McDonald’s lately, you probably have questioned why is McDonald’s so expensive. We’re going to go over the top reasons why the price has gone up, so keep reading!
Why Is McDonald’s so Expensive?
McDonald’s is so expensive due to a variety of factors, including that the company knows it has a diehard fan base that’ll continue paying regardless, plus food prices have skyrocketed. On top of that, the company is shifting towards eco-friendly packaging and removing artificial ingredients and replacing them with natural, healthier ingredients.
We know that you’re now even more intrigued about why McDonald’s is so expensive, so read below to learn all about it!
1. McDonald’s Knows Customers Will Pay
McDonald’s didn’t get to be the second-largest fast-food restaurant without a die-hard customer base, and the company knows it can rely on the customers to keep coming back regardless.
Further, if the company raises prices on all of its items by $.30 each, McDonald’s knows that people can’t resist the food and will gladly pay the money to continue enjoying it.
On top of that, when you go to McDonald’s, you know what you’re getting, and it has always been consistent, so McDonald’s has proven over decades to the customer that increases are worth it.
2. Recycled Packaging
McDonald’s has been moving towards more sustainable and recyclable packaging in the last few years, but this more eco-friendly packaging means higher prices for you as a customer.
Furthermore, the traditional styrofoam packaging was incredibly cheap to make, but moving to eco-friendly packaging has been a more expensive switch, and the costs are passed to you.
3. The Dollar Menu Disappeared
McDonald’s used to have a Dollar Menu for customers to order classic items for just $1, such as a small fry, but that Dollar Menu has since disappeared and been replaced.
Additionally, the replacement is the $1, $2, $3 Menu, which means you’re getting a small price increase on items that used to be just on the Dollar Menu.
Furthermore, the old Dollar Menu led to restaurants having to keep prices lower than what they wanted, which led to a loss of revenue, and that’s why it’s now more expensive.
4. Shift Towards Quality Ingredients
McDonald’s has been shouting from the rooftops that it uses 100% real beef, chicken, pork, and fish for its menu items, but moving to higher-quality ingredients means it’s more expensive now.
Furthermore, McDonald’s also switched out artificial flavoring for natural flavoring, with no fillers and additives in their products.
Likewise, moving away from artificial flavors to natural ones is increasing the costs of making the food, which then gets passed down to the consumer.
5. It’s Practical to Raise Prices on Premium Menu Items
McDonald’s has a lot to offer in terms of food options in varying price ranges, but you can’t increase the costs very much on lower-end menu items such as a cheeseburger.
However, McDonald’s has realized that there’s a lot of flexibility in raising the prices of premium menu items, and it’s more practical.
Furthermore, while someone won’t pay $3 for just a basic cheeseburger, they will likely pay $6 for a Big Mac or Quarter-Pounder since it’s a premium menu item and iconic.
6. Transportation & Deliveries are More Expensive
There is a truck-driver shortage, which means that transportation and delivery of supplies are more expensive than before due to a lot of demand but little supply of drivers.
Furthermore, since there aren’t as many truck drivers, it’s putting strain on the drivers on the roads since they have more deliveries to make and businesses to work with.
7. Higher Hourly Wages
McDonald’s, like other businesses, is having trouble finding workers willing to work fast food, so they have had to raise their hourly wage to entice people to apply for jobs.
Additionally, paying a McDonald’s employee an extra $3 an hour is going to cause the prices at McDonald’s to rise to cover the increase in wages.
8. Cost of Ingredients Is Increasing Rapidly
A lot of people have felt the pain at the grocery store in recent months, and the same hike in food prices has hit McDonald’s, and ingredients are now more expensive to purchase.
When the cost of ingredients to make the popular McDonald’s foods increases, that cost is eventually passed on to the consumer.
However, unlike some restaurants, McDonald’s has chosen to keep their portions the same size and instead increase the cost of the food as opposed to shrinking their famous menu items.
Likewise, keeping portions the same with costs of ingredients going higher means that McDonald’s isn’t making nearly as much profit as a few years ago.
In addition to that, consumers are now increasing their spending at the store, which means there is a bigger demand for food and ingredients, which affects McDonald’s.
9. McDonald’s Increased Employee Benefits
McDonald’s has increased employee benefits to entice more people to apply for jobs, and this is another reason why McDonald’s is expensive.
Furthermore, McDonald’s has to stay competitive with other fast-food restaurants to retain workers, or else they will look for another job, which is why benefits are becoming better.
Additionally, McDonald’s covers the cost of uniforms, offers decent health insurance, offers maternal and paternal leave, tuition assistance, more paid time off, and better holiday pay.
10. Research & Development
McDonald’s also raises prices to pay for research and development, which helps create new menu items and or change ingredients in existing food options.
In addition to that, the test facility in Illinois also has focus groups that test out the new products, and items that are a hit eventually may find their way onto the menu.
11. Move Towards More Family Meals
McDonald’s and other restaurants have been focused more on making family meals for the past couple of years, which are more expensive meal options but are meant to feed a family of four.
On top of that, these combination meal options or family meals are meant to also help boost profits and increase sales since they are usually $10 to $30.
Additionally, family meals are available to help counter the costs associated with higher food prices.
12. Shipping Delays
Shipping delays have been hitting McDonald’s hard over the last year, including items that have to be imported from other countries.
Further, a lot of shipping containers have been caught up in jams and have been delayed from getting from one country to another.
13. New Technology
Lastly, McDonald’s has become so expensive in part due to new technology that is being implemented within the stores.
Further, the new technology includes things such as cardless readers, which allow you to pay with Apple Pay or Google Pay, and self-serve kiosks to pay for your meals.
On top of that, the point-of-sale machines have to be changed out and kitchen equipment upgraded regularly.