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Big Mac sticker shock: $18 combo meals drive McDonald’s revenue sky high

By Jake Beardslee · October 30, 2023

In brief…

  • McDonald's Q3 revenue rose 14% to $6.69B, beating estimates, driven by menu price hikes
  • McDonald's has raised prices ~10% in 2021 and 2022 across U.S. locations
  • New franchisees will pay 5% royalty fee starting in 2024, up from 4%
McDonald's third quarter revenue increased 14% due to strategic menu price increases over the past year, beating Wall Street expectations, though some consumers feel fast food has become too expensive.  Dirk Tussing from Chicago IL, United States/Wikimedia

McDonald’s reported strong third quarter earnings on Monday, beating Wall Street revenue expectations. The fast food giant brought in $6.69 billion in the quarter ended September 30, a 14% increase over last year. Menu price increases implemented over the past year drove the revenue growth.

McDonald’s has steadily raised prices, with the cost of a Big Mac meal varying between locations. One Connecticut restaurant charged $18 for a Big Mac combo, according to The New York Post, while in Times Square it cost $13.69. On an earnings call, CFO Ian Borden confirmed U.S. price increases in Q3, and said McDonald’s expects to hike menu prices just over 10% for the full year. This follows a 10% increase in 2021.

Some consumers feel fast food has become too expensive and is no longer a good value. A Reddit user said “most fast food” is “no longer worth it” given the price increases. They noted a McDonald’s “value meal” now costs the same as a casual dining restaurant entrée.

Starting in 2024, new franchisees will pay a 5% royalty fee, up from 4%. Existing franchisees are exempt. Despite the revenue boost from price hikes, McDonald’s laid off hundreds of corporate staff in April to speed innovation. It also cut pay and benefits for others as part of a consolidation.