#2023 Creative Challenge#In the Chinese fast food market, KFC and McDonald's are definitely the absolute kings, just recently McDonald's announced a price increase that sparked heated discussions in the market, why McDonald's announced a price increase?
1. McDonald's takes the lead in raising prices?
According to a report by China News Service, some netizens said, "McDonald's main products have raised prices across the board, with nearly 90% of major hamburger snack products starting from 0.5 yuan in price, and McCard packages increasing by 1 yuan simultaneously." In this regard, McDonald's responded to Zhongxin Finance that in combination with the recent changes in operating costs, McDonald's China has adjusted the prices of some products, with an average increase of about 3%, and has clearly marked the prices in various ordering channels.
McDonald's price has risen, and netizens have been hotly discussed, some ridiculed, some expressed puzzlement, and some were "angry". Some netizens commented that wages have not risen, and the price of Golden Arches has increased. Some netizens laughed and commented that the price increase cannot increase the poor ghost package. More netizens commented that McDonald's price increase was linked to consumption upgrades, and this netizen commented that Lao Mai, you have taken a small step, which is a big step for my consumption upgrade.
Some netizens also have a negative view on McDonald's price increases, saying that McDonald's burgers are getting smaller and smaller, but the price is getting more and more expensive. Some netizens ridiculed that McDonald's has increased its price and wants to turn around to buy McDonald's flat Tustin.
In January this year, McDonald's 1+1 all-you-can-eat meal was accused of increasing by 1 yuan, from 12.9 yuan to 13.9 yuan. McDonald's told the Red Star Capital Bureau at the time that due to the continued impact of the epidemic on various costs, from January 4, 2023, the prices of some single products and packages for dine-in and McNugget delivery have been adjusted, and the actual price has been clearly displayed on various ordering channels.
Since the beginning of this year, fast food tea retail companies such as Mixue Bingcheng and Tustin have taken measures to increase product prices. However, in terms of product price adjustment, many companies appear to be "cautious" - strive to offset the rising pressure of operating costs in all aspects as much as possible through refined management, and significantly reduce the transmission effect of cost increases to the price increase of terminal products.
2. Is the price rise of fast food really coming?
As a world-renowned fast food brand, McDonald's has attracted much attention for its every move. Recently, the news of McDonald's announcing a price increase has sparked a wide range of heated discussions and discussions.
First of all, in recent years, the rapid rise in various costs has brought great pressure to various catering enterprises. The increase in raw material prices, labor costs, rents, operating expenses and other expenses has made the profit margins of enterprises continue to be compressed while maintaining the original price system. Take McDonald's as an example, the various types of food on its menu require a large amount of meat, vegetables, bread and other ingredients, and the price of these raw materials continues to rise under the influence of global supply chain fluctuations, climate impacts and policy adjustments. In addition, with the development of social economy and the improvement of workers' awareness of the protection of their rights and interests, labor costs are also increasing year by year, which is undoubtedly a big burden for fast food companies that rely on a large number of employees.
Secondly, consumer price sensitivity is a factor that McDonald's must consider when raising prices. Although price increases can be explained to some extent by rising costs, consumers tend to be very sensitive to price changes. In the highly competitive fast food market, McDonald's needs to weigh price increases against market share. If the price rises too quickly or too high, it may cause consumers to switch to other competitors such as KFC, Burger King, etc. Therefore, when McDonald's adjusts its price, it must ensure that the price increase does not unduly affect consumers' willingness to buy.
Third, in the face of cost pressures, fast food companies can choose to raise prices as a coping strategy, but this does not mean that just raising prices will solve the problem. Consumers' demand for fast food is not only to meet basic dietary needs, but also to value cost performance and experience. If there is no corresponding improvement in product quality, service or environment after the price increase, consumers are likely to feel that "the price has increased but it is not worth the money", so they will choose other brands that are more cost-effective. Therefore, while increasing prices, fast food companies must pay attention to improving the value of products and services, so that consumers can feel that although the price has risen, the experience and satisfaction obtained have also increased accordingly.
Fourth, in the current market environment, consumer needs and expectations are getting higher and higher. They don't just focus on the price of the product, but also on the quality, service and emotional value of the product. Therefore, in the process of price increases, fast food companies need to fully consider the needs and expectations of consumers to ensure that consumers can get satisfaction and pleasure in the process of purchasing products. This requires enterprises to carry out all-round improvement in product research and development, marketing strategy, service level and other aspects.
In short, McDonald's took the lead in raising prices, which indeed reflects the current cost pressure faced by catering companies. However, price increases are not the only solution, and companies need to work on other fronts to meet the challenges of the market. In this process, the needs and expectations of consumers are key. Only by truly making consumers feel value for money can they be invincible in the fierce market competition.