The UK boss of burger giant McDonald’s says prices will rise “where customers are willing to pay a little bit more” to recover higher costs from the Middle East conflict
Fast food giant McDonald’s is set to raise its prices because of the Iran war.
The boss of the burger behemoth’s UK arm told the Mirror that a “slight price increase” was on the cards.
What that means isn’t clear at this stage, although she confirmed its Meal Deal and Saver menu items will remain the same. That still means a host of other products could rise in price for its millions of UK customers, including its big-selling Big Mac.
Lauren Shultz, who took over the UK and Ireland arm last September, told the Mirror: “Like any business we have to measure cost pressures with where prices need to go,” insisting it would remain value for money compared to its competitors. “There is a predicted slight price increase,” she added, continuing that it is “in deliberations” about when prices would have to go up.
She later told BBC Radio 4’s Today programme: “We have been operating in a volatile, inflationary industry for years now. With the volatility, though, we are watching where inflation goes. We have long standing, strong relationships with our suppliers, who have given us a lot of cost certainty.
“We will likely to see some prices go up but in a small disciplined way. It is where customers are willing to pay a little bit more.”
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The threat of price rises come after McDonald’s reportedly upped a number of product prices in January this year, with a single hash brown now costing almost £2 in some areas. Hash browns usually cost between £1.59 and £1.69 – already a jump from their modest price of just 89p in 2019.
McDonald’s is just the latest food firm having to consider price rises due to a cost shock caused by the Iran war.
The conflict has seen not just oil prices soar, but also a number of other commodities linked to the blockade of the key Strait of Hormuz.
Industry body the Food and Drink Federation estimated grocery inflation could jump to 9% or 10% by Christmas, even if the conflict is resolved soon.
Karen Betts, FDF chief executive, explained: “Energy is embedded in every part of the food system, from agriculture through to the energy used in greenhouses, manufacturers to make food and chill it, and to move it onto supermarkets and the energy they use.”
A fuel surcharge could be added to best selling bread Kingsmill within weeks because of the Iran war. Maker Allied Bakeries is in early stage discussions with supermarkets and other retailers about including the conflict-linked levy.
The add-on, which sources say could be less than 5p a loaf, is designed to claw back a spike in energy costs for production and transporting bread by road to shops. It will be up to shops to decide whether they pass it on to customers. An 800g loaf of Kingsmill 50/50 medium soft white bread is currently £1.05.
