McDonald’s will likely increase the price of its McDouble cheeseburger. The burger is one of the most popular on McDonald’s one dollar menu, but rising beef costs mean that if a customer purchases just the burger then the McDouble is “a bad financial proposition”.
Richard Adams, a former franchiseee who now works for the company siad: “If the McDouble is all the customer buys, you lose money. Depending on what happens to beef prices, McDonald’s management should be open to taking the McDouble off the Dollar Menu.”
Ground beef prices already are up 6 percent to 8 percent so far this year, said John Davie, CEO of Consolidated Concepts, a firm that helps restaurants negotiate purchases. To be sure, McDonald’s is known for using its massive size to squeeze better prices out of suppliers.
The company forecast commodity inflation of just 1.5 percent to 2.5 percent this year for its U.S. business, far less than the National Restaurant Association’s expectation for 2013 wholesale food price inflation in the low 4 percent range.
Some restaurants across the U.S. have already removed the burger from the one dollar menu. According to Reuters, the McDouble prices have gone up in San Franciso, Los Angeles, Kodiak, Alaska and in New York City.