Price hikes on Big Macs, Chicken McNuggets and other food items helped McDonald’s more than offset sharp increases in food and labor costs and propelled the company’s revenue to its highest level since 2016.
McDonald’s said in a financial report Thursday that global revenues for 2021 were $23.2 billion, a 21 percent jump from 2019 and the highest level since reaching $24.6 billion in 2016. Profits rose 59 percent. percent from a year earlier, to $7.5 billion.
In the United States, fourth-quarter comparable restaurant sales grew 13.8 percent year-on-year – the highest increase ever – due to a combination of menu price increases, promotions around the McRib and Crispy Chicken Sandwich, and the company’s digital loyalty program. company, McDonald’s said.
Speaking to Wall Street analysts, Chris Kempczinski, the CEO and president of McDonald’s, considered 2021 a “banner year for McDonald’s, despite the ongoing disruptions” of the pandemic. The company’s stock rose slightly during afternoon trading.
Still, executives warned that much of the inflationary pressures felt by the restaurant chain in 2021 would continue or even increase in the first half of this year. Last year, food and paper costs rose about 4 percent, while low-teens wages rose in percentage terms. Executives said they expected food and paper costs in the United States to continue rising in the first half of 2022.
To offset those costs and maintain profit margins, McDonald’s, like other fast food chains, increased prices for menu items by about 6 percent last year. As individual franchisees make decisions about how much prices should go up, McDonald’s executives said there was much discussion and research about further price increases and the restaurant chain’s desire to still be seen as good value for its customers.
“That’s what we’re watching very closely as we assess pricing, how customers respond, both in terms of customer research and how they see value and whether they’re still coming in from a transactional standpoint,” said Kevin Ozan, the chief financial officer of the company. McDonald’s.