Why Is McDonald’s So Expensive? (10 Reasons)

 

McDonald’s has a reputation for having low menu prices.

Families can rely on its value menu for cheap food that only costs a few dollars.

However, with food costs and other costs increasing, McDonald’s isn’t as cheap as it used to be.

 

Why Is McDonald’s So Expensive? (10 Reasons)

 

The average price of a meal at McDonald’s is around $5.

McDonald’s is expensive due to higher food costs, the pursuit of more sustainable food and ingredient sourcing, operational costs like rent and franchise fees, and its growing menu.

Let’s look at these factors in more detail.

 

1. Healthy Beef

 

One of the most popular meals at McDonald’s is a burger.

Whether you’re going for the Big Mac or a simple cheeseburger, you can usually expect some flavorful beef patties and a number of different toppings and condiments.

The quality of the beef is what makes McDonald’s a bit more expensive than it used to be.

In the past, people didn’t always think about where their meat was coming from.

With more farmers trying to provide higher-quality beef, more people are starting to take notice.

There’s been a push to source cleaner meat.

As one of the most popular restaurants in America, McDonald’s is at the forefront of this push.

It started sourcing beef that lacked additives, preservatives, and fillers.

Instead, their customers receive simple 100% beef.

It isn’t filled with anything synthetic or other types of meat to make it of higher quality.

The beef, itself, is the shining star.

The problem with using 100% beef is that it’s a bit more expensive.

When McDonald’s used beef with additives, it was able to spread its beef content out a bit more.

That meant the company could save on costs since it wasn’t buying as much beef.

Since the company is focusing on supplying just 100% beef now, it means its beef costs are higher.

With higher beef costs come higher prices.

McDonald’s is expensive because its beef costs are more expensive.

 

2. Sustainable Fish Sourcing

 

A problem that some restaurants are starting to recognize is overfishing of the planet’s oceans.

McDonald’s, like many other fast-food restaurants, usually has an item or two on the menu that uses fish.

It’s a way to offer something for those who prefer seafood.

Because of that, the company is aware that sourcing fish can be problematic.

Some fisheries tend to overfish certain species.

This leads to problems in the future because it means there are fewer of those fish breeding each year.

If fisheries remove more fish than what can reproduce each year, then eventually the species will become extinct.

As such, restaurants that serve seafood often try to do so through sustainable sources.

McDonald’s is no different.

The restaurant serves Alaska pollock as part of its Filet-O-Fish meal.

It works with a sustainable fishery that receives certification from the Marine Stewardship Council.

Because it uses sustainable seafood, however, means its prices tend to be a bit more expensive.

Sustainable fisheries keep themselves to specific quotas.

Once they reach that quota, they can’t fish anymore in that area until the next season.

This results in a shortage of fish to sell since they’re not catching as much as they could.

To ensure they still remain profitable, they have to sell the reduced supply of fish at higher prices.

McDonald’s ends up paying higher prices for the fish.

To cover the costs, it sells its fish meals at higher prices.

McDonald’s is expensive because it buys sustainably-sourced fish.

 

3. Cage-Free Eggs

 

McDonald’s also uses cage-free eggs for all of its egg-related dishes.

McDonald’s is aware that people are becoming more sympathetic and sensitive to the plight of the animals that they eat.

Many want the animals to live in humane conditions.

Not only does it improve the happiness of the animals, but it can also promote healthier conditions.

Healthier animals lead to healthier meat and food products.

As such, McDonald’s has started to source its eggs from farmers who have cage-free chickens.

This essentially means that the chickens can roam around.

They’re not living in cages their entire life and pumping out eggs for the farmers to sell to McDonald’s.

Instead, the chickens are able to move around, exercise, and are often allowed to be free-range.

These types of chickens are a bit more expensive to raise, however.

The farmer has to have more land where they can roam, and they need to increase security.

Since their costs are a bit higher, they sell their cage-free eggs at higher costs.

McDonald’s, in turn, has to sell its egg-related products at higher prices to offset the costs it took on.

McDonald’s is expensive because it’s starting to use cage-free eggs which come from more expensive farms.

 

4. Sustainable Coffee Beans

 

It isn’t just food that McDonald’s has attempted to become more eco-conscious about.

McDonald’s has also put more effort into getting its coffee beans from sustainable sources.

One of the problems with growing coffee is that it has ties to deforestation.

Whether it’s farmers clearing more land to grow more coffee trees or farmers simply growing coffee trees on land that is already clear from previous deforestation attempts, there’s a link between coffee beans and deforestation.

Considering that coffee trees need almost tropical conditions in which to grow, they’re often close to rainforests.

This becomes a problem because if farmers are deforesting to make room for more coffee trees, then they’re affecting vital rainforests.

McDonald’s is aware of the problems that sourcing coffee beans can cause.

As such, it has started working with coffee growers that have certification from the Rainforest Alliance.

Certification ensures that the farm isn’t a threat to rainforests.

However, because these farms likely take on higher costs or have to sell at higher prices as a result of being sustainable, it means McDonald’s is taking on higher costs, too.

McDonald’s is expensive because its sustainably sourced coffee beans are more expensive.

 

5. More Expensive Milk Costs

 

Milk prices have also increased.

One of the primary factors leading to higher milk costs is the cost of feed.

Farmers need a good amount of feed to keep their cows healthy.

Without feed, a cow might not produce milk because it’s not healthy enough.

Several different crops become animal feed.

Some farmers will use grains while others will use a mix of corn and soybeans.

All of these staples have become more expensive due to higher fertilizer costs and drought problems.

Since the crops, themselves, are becoming more expensive, feed is more expensive, too.

Farmers have to take on higher costs to keep their cows fed.

In order to make ends meet, they’re selling their products at higher prices.

That includes higher prices on milk.

Since McDonald’s is paying higher prices for its milk, then it’s also going to have higher prices on its milk products.

Buying chocolate milk or just standard milk at the restaurant is going to be more expensive.

McDonald’s is expensive because of the rising price of milk.

 

6. High Rental Costs

 

Some McDonald’s locations are also more expensive than others based on their locations.

Commercial real estate can become pretty expensive in areas where demand is high.

That’s why big cities will often have more expensive rental prices than smaller cities or towns.

Since there isn’t that much room to develop, the land that does exist sells for high prices.

Landlords also charge high rental costs for the land that they own.

The better the location is in terms of foot traffic, the higher the rent tends to be.

This makes McDonald’s expensive because some McDonald’s stores are in extremely expensive areas.

In order to cover rent costs, restaurants in popular, high-traffic areas may need to charge slightly more expensive prices than other McDonald’s restaurants.

That can potentially double for McDonald’s restaurants that have a play place.

They need more room than restaurants that don’t have a play place.

Since their square footage is larger, their rental costs are higher.

McDonald’s is expensive when it’s located in a high-rent area.

 

7. Agricultural Problems

 

While meat is popular at McDonald’s, there’s nothing quite like McDonald’s fries.

Since fries come from potatoes, McDonald’s also has its share of vegetable-related costs.

Normally, potatoes are among the cheapest crop to produce.

However, that isn’t the case recently.

Potatoes, and many other crops, are experiencing problems that are either making them more expensive to grow or reducing their supply.

Fertilizer costs are one of the biggest problems.

Because there isn’t much fertilizer coming out of Europe, farmers have had to pay high prices for the little fertilizer that they can get their hands on.

Since fertilizer is more expensive, they have to sell their crops at higher prices to make up for their losses.

Drought is another problem impacting many crops from grains to potatoes.

Since drought can destroy a farmer’s yield, there are fewer vegetables on the market.

That means shortages and higher prices.

Since McDonald’s is facing higher prices for its vegetables, it has to sell its menu items at higher prices to make up the difference.

McDonald’s is expensive because of the high price of vegetables.

 

8. Franchise Fees

 

Another expense that every McDonald’s restaurant faces is franchise fees.

Each McDonald’s restaurant that you see is operated by an individual.

While the parent company might help them in some regards, by and large, it’s up to the owner of the franchise to run the ship.

The individual owners have to pay a fee to the parent company.

It essentially gives them permission to operate the McDonald’s restaurant in that area.

Depending on a few factors, some restaurants’ fees might be higher than others.

To stay afloat, a restaurant may need to charge more for menu items.

It obviously can’t charge high prices on certain menu items that the parent company forbids it to raise prices on, but it can get away with higher charges elsewhere.

Franchise fees cut into a restaurant’s profit.

To ensure they still make a good amount of profit, franchisees sometimes charge more expensive prices.

McDonald’s is expensive because of franchise fees.

 

9. Large Menu

 

There is never a lack of options when it comes to eating at McDonald’s.

It has something for everyone.

While this is great for customers, it isn’t as great for McDonald’s in regard to cost.

Because McDonald’s has such a large menu, it means that it has high food costs.

It needs to supply lots of different types of food.

It’s not just a “burger and fries” joint.

It has chicken and fish items, too.

It has desserts and shakes and coffee.

It’s juggling a lot of different menu items.

This makes food costs higher.

If a particular part of its food costs becomes high, then the restaurant might need to charge more for its menu items to offset those costs.

McDonald’s is expensive because of its large menu.

 

10. Inflation

 

A final reason McDonald’s is expensive is inflation.

Inflation is behind a lot of high prices.

It’s making resources expensive which is driving costs higher across the board.

Even energy is more expensive.

As such, it becomes more expensive for McDonald’s to buy the food and tools it needs as well as operate its restaurants.

With higher operational costs come higher prices.

McDonald’s is expensive because of inflation.

NEXT:  Does Lowe’s Have Curbside Pickup? (2023 Updated)