McDonald's hikes burger prices as supply chain pressures hit

27 July 2022

McDonald’s is raising the price of a cheeseburger by 20% as inflation creates “incredibly challenging times”.

McDonald’s said its 99p cheeseburgers would go up to £1.19 – the first price rise in 14 years – while other items will go up by 10-20p.

The company said it had “delayed and minimised” price increases as it sought to absorb supply chain pressures.

In an email sent to customers, Alistair Macrow, CEO of McDonald’s UK and Ireland, said: “Today’s pressures mean, like many, we are having to make some tough choices about our prices.” 

He continued: “We know things are tough right now. We’re living through incredibly challenging times and we’re all seeing the cost of everyday items, such as food and energy, increase in a way many of us have never experienced. 

“Just like you, our company, our franchisees who own and operate our restaurants, and our suppliers are all feeling the impact of rising inflation.”

The company said it was committed to supporting suppliers despite increasing costs.

Meanwhile, cleaning giant Reckitt Benckiser, which owns Dettol and Lysol, raised prices by 9.7% in the second quarter of the year due to “challenging” supply chain conditions.

The company said: “The supply chain environment continues to be challenging, both in terms of logistical availability and certain raw material constraints. While our supply team works to find mitigations, we continue to monitor the situation and look to continue to improve our customer service.” 

Reckitt benefited in sales of its baby formula due to “temporary supply issue of infant nutrition products in the US” and “temporary competitor supply issues”, after key competitor and market leader Abbott Laboratories recalled dozens of products earlier this year, causing supply shortages across the US.

Reckitt has now become the leading baby formula supplier in the country and now feeds around half of infants in the US.

The company said: “This growth was driven by a combination of substitution purchases in the absence of competitor product availability in store, consumers building up ‘safety stocks’ out of concerns on availability.

“We expect operating margins to normalise as we exit 2022 due to the expected resolution of competitor supply issues, and their increased investment to regain market share.”

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