With nearly 13,500 locations, McDonald’s is inevitably going to be thrust into our national conversations on occasion, but this week may have exceeded any previous expectations for the topic. And it’s only Wednesday…
Late Tuesday, we learned that McDonald’s is the target of a Centers for Disease Control and Prevention investigation of an E coli outbreak spanning 10 states. The CDC said the outbreak has killed at least one person in Colorado and sickened dozens of others and is linked to slivered onions served on the chain’s signature Quarter Pounder.
We know in this business that food safety is paramount and that risks are constant. We’ve seen such risks develop into crises at Taco Bell, Chipotle, and Jack in the Box in years past, crises that have taken quite some time to recover from – reputationally and financially (McDonald’s shares fell by at least 10% after market on Tuesday). Of course, when we’re dealing with severe illnesses and fatalities, brand reputation and stock prices take a back seat.
Meanwhile, and shortly before its E. coli news broke, McDonald’s chief executive officer Chris Kempczinski received a letter from United States Senators Elizabeth Warren (D-Mass.), Bob Casey (D-Pa.), and Ron Wyden (D-Ore.) pushing for more information about the chain’s pricing decisions as the quick-service segment continues to outpace the overall Consumer Price Index.
“While McDonald’s is not the only fast-food restaurant that has increased prices significantly in recent years, its dominant market position as the largest fast food chain in the United States has an outsize impact on American consumers. While working families are trying to make ends meet, McDonald’s and its corporate counterparts have continued to grow their profits,” the senators wrote, noting that McDonald’s net annual income rose by over 79% – or nearly $8.5 billion – from 2020 to 2023.
“Corporate profits must not come at the expense of people’s ability to put food on the table,” the senators added. “As we seek to investigate and understand the increased consumer costs in the economy, we hope McDonald’s will help us to understand why its prices have risen so high.”
In a statement emailed to Nation’s Restaurant News, McDonald’s said the senators’ letter “demonstrates a lack of understanding of our franchise business model and contains contortions of facts and many inaccuracies.”
“McDonald’s and our franchisees are committed to keeping prices affordable – from the everyday prices on our menu boards, to our popular $5 Meal Deal and other offers available locally or on the app,” the company stated. “Take the components of the $5 Meal Deal with McChicken, for example – which would have cost 15% more in 2020 than they do today. That’s the opposite of price gouging.”
Notably, the chain has been defending its prices for several months now, starting with a rare public letter from McDonald’s USA president Joe Erlinger in May addressing “inaccurate” information.
Erlinger specifically pointed to “viral social posts and poorly sourced reports that McDonald’s has raised prices significantly beyond inflationary rates.” He cited several reasons as to why the chain’s prices have gone up – the pandemic, supply chain costs, wages, etc. – driving the average cost of a Big Mac up 21% since 2019, not 100% as has been widely shared, he added.
Amid this debunking effort is the chain’s exodus of low-income consumers, which also prompted the launch – and extension – of its $5 Meal Deal, now available through December. McDonald’s reports third quarter results next week, and we’ll likely learn if the deal has been effective in gaining those customers back.
And, just as it responded to “inaccurate” social media posts, McDonald’s has promised to respond directly to the letter from Senators Warren, Casey, and Wyden.
The chain’s long week began Sunday when former President Donald Trump visited a location in Pennsylvania to serve fries and answer some questions. It was widely reported that his appearance was in response to a debate between him and his opponent in this presidential election, Vice President Kamala Harris, about whether she actually worked at the chain in the 1980s, as she’s claimed. Their exchange has devolved into a he said/she said situation and has ignited plenty of bizarre political takes that probably aren’t worth a trade publication’s ink. But it did extrapolate a much bigger point and one that the McDonald’s team expertly conveyed in an internal message sent out following Trump’s visit:
“… Our brand has been a fixture of conversation this election cycle. While we’ve not sought this, it’s a testament to how much McDonald’s resonates with so many Americans.”
Indeed, it’s a testament to the chain’s ubiquity, accessibility, and familiarity. That said – and especially as McDonald’s has learned so far this week – such attributes created by sheer bigness can resonate in both positive and negative ways.
Contact Alicia Kelso at [email protected]
