“Another rise? I can’t afford another rise!”
“No! Come on, come on, join our group and give us French fries or taro pie.”
At a McDonald’s restaurant in a bustling area of Beijing, a consumer complained about the rising price of hamburgers and turned around to leave. The shopping guide grabbed her, introduced the latest gift activities in the store, and tried to persuade her to join the “internal group”.
On February 17, the reporter of Securities Daily stayed here for more than an hour. The store had a huge flow of people, and most consumers were attracted by the “buy give” activity. In fact, the price of the meals they bought has quietly increased.
“Pork chop and ham chop rose by 1 yuan yesterday.” The clerk told reporters. In the past two years, McDonald’s has carried out several rounds of price adjustment in the Chinese market, and the prices of various meals have increased by 0.5-3 yuan
All kinds of preferential information boards are hung in front of the counter
Public information shows that McDonald’s has opened a round of price increase mode all over the world. Since February 17, McDonald’s in South Korea has raised the prices of 30 dishes by 100 to 300 won (about 0.5-1.5 yuan). The US market may also join the price increase.
multiple rounds of price increases are carried out with ” low profile “
“Generally, we don’t publicize it to the public. We will notify the price adjustment internally, and the corresponding preferential package price will be directly increased.” The clerk said.
The reporter noted that McDonald’s almost quietly carried out each round of price rise, and McDonald’s had never made a statement in public channels before the price rise.
For the price adjustment method, the person in charge of a McDonald’s store told reporters: “McDonald’s sales prices in China are unified, and the price adjustment is internal. Some stores with small traffic may be later.”
This is not the first time McDonald’s has raised prices. Previously, its super value breakfast combination of crispy chicken and wheat has risen from 6 yuan to 7 yuan, and the super value lunch of double-layer cheese and wheat fragrant fish has risen from 15 yuan to 16 yuan. Today, Kesong with ham and egg has risen to 17 yuan. At the same time, McDonald’s also increased a number of binding consumption, such as Oh McCarthy.
In the early 1990s, McDonald’s just entered China. Due to the relatively high price of meals, it was recognized by Chinese people as a “luxury and high-end foreign fast food”. With the improvement of national consumption level, McDonald’s has raised prices for many times. KFC, which forms a direct competitive relationship with McDonald’s, adjusted its price three times in 2021 alone, with an increase ranging from 1 yuan to 2 yuan. Last year, KFC crispy chicken rose from 12.5 yuan to 13 yuan, and lemon black tea drinks also rose by 0.5 yuan.
local supply chain capacity to be stabilized
In 2021, McDonald’s announced that the number of stores in China exceeded 4000 and expanded on a large scale, running out of the “fastest opening speed in the history” of the Chinese market in 31 years.
The reporter roughly calculated that since McDonald’s entered the Chinese market, the highest price increase of its single product has more than doubled. In addition to inflation, epidemic situation, rising costs and other factors, the current external environment in China has led to tension and mismatch in the supply chains of many major brands, which has also led to enterprises having to transfer pressure to the terminal.
Zhu, a senior researcher of danpeng securities, said: “this is the test of our ability to maintain the stability of its supply chain after the rise of its price.”
At present, McDonald’s main meat suppliers in China are Mingji, Cargill, Fujian Sunner Development Co.Ltd(002299) and so on. The vegetable supplier is to create food. It is worth noting that China’s largest shareholder of McDonald’s China is CITIC with Chinese background. CITIC shares and CITIC Capital indirectly hold 10% and 42% of the shares of McDonald’s China respectively. According to a supply chain source, “McDonald’s shareholders are considering increasing the number of Chinese suppliers to stabilize local supply capacity and price level.”
According to Li Yingtao, research director of Analysys new consumer industry center, “in recent years, China’s listed agricultural and sideline products companies have grown rapidly, transiting from medium and low-end to high-end, which can gradually meet the supply of more international giants. In the future, they need to further strengthen the catering supply chain and embark on the road of scale.”
