Yahoo Finance ‘Simply not true’: McDonald’s CEO pens letters to ‘fans’ to set the record straight about those $18 Big Macs
McDonald’s USA president, Joe Erlinger, has some real beef with anyone spreading “inaccurate” information about the fast food chain’s price hikes over the last five years.
He’s not lovin’ the rumors — specifically one about Big Macs across the nation costing $18 — to the extent that he recently penned an open letter to McDonald’s U.S. fans to set the record straight.
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“Recently, we have seen viral social posts and poorly sourced reports that McDonald’s has raised prices significantly beyond inflationary rates. This is inaccurate,” he wrote.
“I can tell you that it frustrates and worries me, and many of our franchisees, when I hear about an $18 Big Mac meal being sold — even if it was at one location in the U.S. out of more than 13,700.”
What’s even more worrying for the McDonald’s head honcho is the fact that many Americans seem to believe the $18 price tag for the signature burger, fries and a drink is “the rule and not the exception.” Here’s what he had to say for “fans” who might be worried about the food chain’s rising prices.
‘These McDonald's prices are nuts right?’
The waning affordability of fast food joints across the nation has really tugged at American families’ purse strings in recent years — and McDonald’s, as a household favorite, has been a target of discontent.
Last summer, an X user shared a photo of a McDonald’s menu at a Connecticut rest stop, where a Big Mac meal was listed at $17.59. The user asked, “These McDonald's prices are nuts right?”
This has led some unhappy individuals to accuse the fast food giant of “greed and price gouging” — but Erlinger was keen to nip that discourse in the bud.
“The average price of a Big Mac in the U.S. was $4.39 in 2019. Despite a global pandemic and historic rises in supply chain costs, wages and other inflationary pressures in the years that followed, the average cost is now $5.29. That’s an increase of 21% (not 100%),” he wrote in his letter, alluding to a @HouseGOP post on X that suggested the price of the burger had soared 104% in the last five years.
As for another common myth that McDonald’s has raised its prices at three times the national rate of inflation, Erlinger said: “That is just simply not true.”
He shared the average price of several popular items in 2019 and 2024 to make his point. He claims an Egg McMuffin cost $3.49 five years ago and is $4.29 today, which is an increase of 23%. Meanwhile, a Quarter Pounder with Cheese was $4.49 in 2019 and $5.39 today (up 23%) and a Filet-O-Fish was $3.99 back then and $4.79 today, at an average price increase of 20%.
All of these average price hikes are lower than the food-away-from-home inflation during the same period, where costs have jumped nearly 30%. Erlinger stressed: “Prices for many of our menu items have risen less than the rate of inflation — and remain well within the range of other quick service restaurants.”
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What’s driving the price hikes?
As a franchise model, the owners (or franchisees) of each individual McDonald’s restaurant have the ability to set their own menu prices.
While one location may charge $16 for a Big Mac meal, another may charge $10. That price difference could come down to several factors, including labor costs, foodp/paper costs, taxes, the cost of real estate and the general health of the local economy.
Labor costs, specifically, have come into the spotlight after the state of California — which is home to nearly 1,300 McDonald’s restaurants, more than 230 owner/operators and more than 70,000 restaurant crew and managers — introduced a new $20 hourly minimum wage for most fast food workers.
Franchisees in the Golden State have been scrambling to figure out how to “minimize the impact of price increases on [McDonald’s] fans” — to quote Erlinger’s letter — while also abiding by the new law and turning a profit. Some owners have spoken out saying their only option is to raise prices considerably.
Erlinger did not directly address the California challenges in his letter. Rather, he focused on national inflation, explaining: “Inflationary pressures have affected all sectors of the economy, including ours. Our franchisees (who own and operate more than 95% of all restaurants in the U.S.) set menu prices for their restaurants, which account for the increased costs of running their businesses.”
He claims the costs of running a McDonald’s restaurant “have gone up” in the past five years, with crew salaries up around 40% since 2019 and the cost of goods up around 35% in the same period. Food price increases have gone up in tandem and according to Erlinger, the “resulting margins are largely the same today as they were in 2019, which is the opposite of so-called gouging.”
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