McDonald’s says more product price rises possible
BEIJING (Reuters) –
McDonald’s Corp (MCD.N) said on
Thursday it was considering further price increases, but would
do nothing that slowed customer traffic into its global network
The world’s largest restaurant chain posted second-quarter
profit that beat expectations on strong international sales,
but said to offset mounting commodity pressures it was looking
at changes to the popular Dollar Menu, which lures value
“I don’t think customers care that much if the price moves
slightly away from a dollar,” Chief Executive Jim Skinner told
Reuters in an interview on the sidelines of an event to mark
its sponsorship of the Olympics.
“It will always be the best value around,” he said.
Much speculation swirls around the fate of the Dollar Menu
double cheeseburger, which McDonald’s has tested in certain
markets at prices up to $1.29.
Skinner said McDonald’s might adjust some prices in the
menu, but that it would not abandon the Dollar Menu because it
was a key part of bringing customers into its stores.
“We won’t get rid of the Dollar Menu … we must maintain
traffic,” Skinner said.
During the first half of the year, McDonald’s raised prices
in the United States by 4 percent and prices across Europe were
boosted by 2 percent to 4 percent.
But the price rise accounted for just under half of the
average annual gain in commodity prices that McDonald’s faces.
While reducing costs and increasing efficiency are a part
of McDonald’s everyday operations, the company would not scale
back its expansion.
“You can never shrink your way to prosperity,” he said.
“What we need to do is grow. If we grow the top line, that will
take care of the (profit) margin.”
McDonald’s international operations continued to grow at a
brisk rate, helping to insulate the company from the
housing-led U.S. economic downturn that is hurting upscale
(Reporting by Kirby Chien; Editing by Louise Heavens)
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