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Value will increase on Large Macs, Rooster McNuggets and different meals objects helped McDonald’s greater than offset sharp rises in meals and labor prices and propelled the corporate’s revenues to the very best degree since 2016.
McDonald’s mentioned in a monetary report on Thursday that world revenues for 2021 topped $23.2 billion, a 21 p.c soar from 2019 and the very best degree since reaching $24.6 billion in 2016. Revenue soared 59 p.c from a 12 months earlier, to $7.5 billion.
In the US, comparable restaurant gross sales within the fourth quarter grew 13.8 p.c from a 12 months earlier — the very best enhance ever — from a mix of menu value will increase, promotions across the McRib and the Crispy Rooster Sandwich, and the corporate’s digital loyalty program, McDonald’s mentioned.
On a name with Wall Road analysts, Chris Kempczinski, the chief govt and president of McDonald’s, deemed 2021 a “banner 12 months for McDonald’s, regardless of the continued disruptions” of the pandemic. The corporate’s inventory was up barely in noon buying and selling.
Nonetheless, executives warned that lots of the inflationary pressures that have been felt by the restaurant chain in 2021 would persist and even enhance within the first half of this 12 months. Final 12 months, the value of meals and paper prices grew about 4 p.c, whereas wages elevated by percentages within the low teenagers. Executives mentioned they anticipated meals and paper prices to proceed to extend within the first half of 2022 in the US.
To be able to offset these prices and preserve revenue margins, McDonald’s, like different fast-food chains, elevated costs for menu objects by about 6 p.c final 12 months. Whereas particular person franchise homeowners make selections about how a lot costs ought to enhance, McDonald’s executives mentioned there was numerous dialogue and examination round additional value will increase and the restaurant chain’s want to nonetheless be seen as a great worth to its clients.
“That’s the place we hold a extremely shut eye as we take pricing, is how clients are reacting, each by way of buyer analysis and the way they view worth and whether or not they’re nonetheless coming in from a transaction standpoint,” mentioned Kevin Ozan, the chief monetary officer for McDonald’s.
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Supply- nytimes