McDonald’s is battling perceptions its prices are too high after someone posted an $18 Big Mac meal.
McDonald’s faced backlash after news of an $18 Big Mac meal went viral, highlighting high prices at a reputed low-cost chain. Fact-free claims about inflation, including a House Republicans’ X account post alleging Big Mac prices have doubled since the pandemic, fueled the controversy.
However, financial commentators and McDonald’s clarified that Big Mac prices have risen 21% since 2019, less than the 23% inflation rate and 28% food inflation. Nobel-winning economist Paul Krugman noted that nonsupervisory wages have increased by 28%, suggesting that, in real wage terms, buying a burger is now less burdensome.
In an open letter, McDonald’s US president, Joe Erlinger, addressed concerns over an $18 Big Mac meal, emphasizing that this price is an exception and not the norm. Erlinger noted the importance of maintaining value and affordability, countering claims that Big Mac prices have doubled since 2019. He highlighted that prices have only risen 21%, less than overall inflation.
The letter appeared defensive to investors, especially after recent disappointing financial results. McDonald’s stock has only increased by 28% over the past five years, lagging behind the S&P 500’s 90% return. The $18 Big Mac controversy, with nearly half a million views, may amplify issues unnecessarily. Erlinger is clearly concerned about the company’s delicate situation and the impact of social media on its affordability image.
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