- McDonald's has raised the price of its cheeseburgers by 20% in the UK, the first increase in 14 years.
- The burger giant's CFO warned this week that it was planning "smaller, more frequent price increases."
- Inflation means the cost of fuel, food, and packaging are soaring, and being passed to customers.
Fast-food giant McDonald's has raised the price of its cheeseburgers by 20% in the UK — its first such price hike in the country for 14 years.
McDonald's warned of "frequent price increases" in its earnings call on Tuesday and said that it had raised prices by close to 10% over the past year amid soaring inflation.
CFO Kevin Ozan told investors that customers were spending more per order, which he said was driven "mainly by price increases."
Ozan said that McDonald's was "taking smaller, more frequent price increases because it gives us the flexibility to be able to see how consumers are reacting and then adjust if or when necessary."
He said that the company bases its prices on consumer research and guidance from a third-party adviser.
McDonald's UK told customers in an email on Tuesday that it was raising some prices because of inflation. This included what it said was the first price change for its cheeseburger in 14 years, a jump of £0.20 ($0.24) to £1.19 ($1.44).
It said other items would also get more expensive, though it didn't name any specific products.
"Some prices remain unaffected, and some will continue to vary across our restaurants," the email said. "We understand that any price increases are not good news, but we have delayed and minimized these changes for as long as we could."
Ozan said on the McDonald's earnings call that it expected its food and paper prices in the US to rise around 13% in the year to December 2022. Wages had risen around 10% in the year to late June, he added.
He added that McDonald's expected inflation in the US to start to moderate in the fourth quarter, but warned that inflation would keep rising in other markets.
"It certainly varies by country," Ozan said. "But in general, the international side will get hit a little bit harder than the US and it will last a little bit longer later in the year than the US right now."
McDonald's is far from the only fast-food giant bumping prices. Chipotle has also announced that it is raising prices by at least 15%.