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Why Could It Cost More to Eat at McDonald’s? — Dollars and Sense

McDonald's Asks Meat Suppliers To Alter Use Of Antibiotics
Joe Raedle, Getty Images

During times of slow economic growth and high unemployment, business for cheap fast food restaurants like McDonald’s usually surges. It turns that out that profits may not be the only things skyrocketing at a McDonald’s near you, though.

Food, labor and commodity costs are all expected to rise in America this year by at least 4.5 percent. So even though the global fast food chain has experienced a rise in quarterly earnings, the rise in costs may also be hinting at a rise in costs for the customers.

However, the restaurants in Europe have seen a stronger foothold in the market share and a rise in prices could destroy what McDonald’s has worked to build on the other side of the pond. So, in short, prices for American menus could see a gradual increase, while European prices are staying right where they are.

The price hikes aren’t likely to happen overnight. The most likely changes will first come from their famous Dollar Menu as some of the more popular items will take up other, higher priced real estate on the restaurant chain’s menu. The restaurant also realizes that sudden price hikes could damage its bottom line in the States, since items such as the $2 snack wraps have helped make it profitable in unsure economic times. Instead, the company hopes that an expanded menu in other regions across the world that offer more things like smoothies and more breakfast items can keep prices from rising too high.

[The Wall Street Journal]

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