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McDonald's writes letter for first time to customers claiming its price rises are reasonable

McDonald's recently penned an unprecedented open letter to its customers, addressing the concerns surrounding its price increases. 

In the letter, McDonald's President, Joe Erlinger, sought to reassure customers that the price rises were reasonable, countering reports suggesting otherwise.

This is the first time McDonald's has taken such a step to communicate with its customers about pricing.

Erlinger emphasized that while there have been claims of significant price hikes, these reports are inaccurate.

He stated that prices at McDonald's have increased by approximately 40% across its 14,000 US restaurants since before the pandemic.

However, he acknowledged that the average rate of inflation in the US during the same period was 22%, and for food specifically, it was only slightly higher at 26%, according to the US Bureau of Labor Statistics.

The open letter aimed to address the perception that McDonald's had been profiteering or acting unfairly. 

Neil Saunders, an expert from GlobalData, commented that the letter was an attempt to reassure customers. However, the reality is that the cost of menu items has indeed become more expensive. 

While acknowledging that this may not be McDonald's fault, Saunders highlighted the challenge of higher prices for a meal that is supposed to be an affordable indulgence.

Erlinger justified the claim that McDonald's had not raised prices by double the inflation rate by pointing to specific costs associated with the chain.

In the letter's "myths vs facts" section, he clarified that the average input costs, including salaries, food, and paper, had increased by around 40% over the past five years, aligning with the average price of menu items.

The letter also acknowledged specific price increases for popular McDonald's items. 

For instance, a 10-piece McNuggets Meal had seen a typical price increase of 28 percent, rising from $7.19 to $9.19. 

Similarly, a Big Mac had gone up by 21 percent, a Quarter Pounder with Cheese by 20 percent, and an Egg McMuffin by 23 percent. 

However, Erlinger emphasized that these higher-priced meals were exceptions rather than the rule.

While Erlinger expressed his concern over the prices of certain items, he stressed that they were isolated instances and not representative of the overall pricing structure at McDonald's.

He highlighted the need to differentiate between exceptional cases and the general perception that prices had risen 100 percent since 2019.

Over the past decade, prices for typical combo meals at the five largest burger chains, including McDonald's, Burger King, Wendy's, Carl's Jr, and Five Guys, had risen up to 120%.

This increase is more than three times the official inflation rate.