Contrary to popular belief, a Big Mac combo meal at McDonald's does not cost $18. This misconception was sparked by a viral post showing the price at a rest stop in Connecticut. However, Joe Erlinger, the president of McDonald's USA, has clarified that this price is an exception, not the norm. The average cost of a Big Mac combo nationwide is $9.29, according to a fact sheet released by the fast food giant.
The viral post highlighted growing frustration among consumers over the rising cost of fast food. In response, McDonald's has announced a $5 menu. This move is seen as a strategic response to the backlash, rather than a coincidence.
Fast food chains have been able to raise prices without significant customer pushback during the pandemic. This is due to increased consumer purchasing power, driven by higher wages and savings accumulated during the pandemic. However, as wages stagnate and savings decline, consumers are increasingly sensitive to price increases.
Erlinger defended the price increases, stating that the average price of a Big Mac in the US was $4.39 in 2019 and has only increased to $5.29, a 21% increase, not 100%. This is lower than the 23% overall rise in prices of goods and services over the same period, as calculated by the Consumer Price Index (CPI).
The fast food industry is not the only sector experiencing price hikes. For example, the average cost of auto insurance for US consumers has risen more than 40% since 2019, according to CPI data.
McDonald's is not alone in its efforts to win back customers through price cuts. Other companies like Target, Walgreens, Amazon, Walmart, Wendy's and Starbucks are also slashing prices on thousands of items. This trend indicates that consumer frustration with rising prices is beginning to affect corporate bottom lines.
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