The #1 Reason Why McDonald's Is Still a Top Restaurant Option For Customers
McDonald's prices are up 8% over this time last year—but yet, despite price increases, the chain still remains a top moneymaker.
Even further, the chain reported that sales were up 3.5% for the first quarter of 2022 over the previous year. This is despite the fact that nearly half of consumers plan to reduce spending on dining out due to price increases, according to survey data.
McDonald's Chief Financial Officer Kevin Ozan explained in an earnings call last week that there's one thing that has been increasing to explain this trend.
"Food at home has been increasing even more than food away from home, so that's probably been a little benefit to us also," he told investors in the call.
With grocery prices skyrocketing, fast-food chains like McDonald's and Chipotle are similarly reporting growth, even when having to slap a higher price tag on the overall menu.
According to the most recent Food Price Outlook report for April, six major food groups are going to continue to go up in price through the rest of the year. These include fruits and vegetables, dairy, eggs, red meat, chicken, and fish.
People are seemingly willing to pay more for fast food, even though it costs more. That's because in the past year, grocery store beef prices were up a whopping 16%, while McDonald's only raised prices by 8%, making it seem more attractive to someone trying to save a few bucks.
Food at home prices have risen 10% in the past year, which is the biggest jump since 1981. Food away from home, including restaurant food, also rose by almost 7%, according to the Consumer Price Index data from the Bureau of Labor Statistics.
In March 2022, all food was up 10% over the previous year. Food prices also rose 1% from the previous month. A breakdown of the data shows that inflation is impacting food at home which includes grocery store purchases.
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