Price increases on Big Macs, Chicken McNuggets and other food items helped McDonald’s offset sharp increases in food and labor costs, and sent the company’s 2021 revenue to its highest level since since 2016.
McDonald’s said in a financial report Thursday that global revenue hit $23.2 billion last year, up 21% from 2019 and the highest level since hitting $24.6 billion in 2016. 2016. Profits increased 59% from a year earlier, to $7.5 billion.
In the United States, comparable McDonald’s restaurant sales in the fourth quarter rose 13.8% from a year earlier – the highest increase ever – from a combination of menu price increases, promotions around McRib and Crispy Chicken Sandwich, and the company’s digital loyalty program, McDonald’s said.
On a call with Wall Street analysts, Chris Kempczinski, chief executive officer and president of McDonald’s, saw 2021 as a “banner year for McDonald’s, despite the continued disruption” of the pandemic. The company’s shares were down less than 1% in late Thursday trading.
However, executives warn that many of the inflationary pressures the chain feels in 2021 will persist or even increase in the first half of the year. Last year, food prices and paper costs rose about 4%, while wages rose by a percentage point among low-income youth. Executives said they expect food and paper costs to continue to rise in the first half of 2022 in the United States.
To offset those costs and maintain margins, McDonald’s, as well as other fast food chain, increased menu prices by about 6 percent last year. While individual franchise owners make decisions about how much prices should increase, McDonald’s executives say there’s been a lot of discussion and consideration around raising prices further. and the desire of the restaurant chain to still be considered a good value for customers.
Kevin Ozan, the chief financial officer of McDonald’s.
https://www.nytimes.com/2022/01/27/business/mcdonalds-earnings.html McDonald’s tops $23 billion in revenue in 2021