JAPAN: Japan’s McDonald’s fast food restaurants stated on Monday that they would raise prices on almost 60% of their menu items as a result of shifting currency rates and rising input costs.
It is the company’s second round of price increases this year as Japan struggles with inflationary pressures and a decline in the value of the yen to a 24-year low, increasing the cost of imported materials. The two sets of increases this year are the first since 2019.
Items with hiked prices
The price of the renowned Big Mac hamburger will rise from 390 yen to 410 yen ($2.85) as of this Friday, according to a statement from McDonald’s Holding Company Japan Ltd (2702.T), reflecting price hikes of 10 to 30 yen on numerous goods.
The Economist magazine’s index of global pricing estimates that a Big Mac costs $5.15 in the United States. According to the gauge’s most recent update from July, the price differential showed that Japan’s currency was undervalued by 45%.
For the second time in 2022, McDonald’s Japan is raising the cost of its cheeseburgers. Starting on Friday, they will cost 180 yen each, up from 140 at the start of the year.
Separately, Mister Donut stores in Japan will increase prices for the majority of items starting on November 25 by around 7.4%, according to the parent business, Duskin Co.
Cause of price hike
The business, which manages retail locations for McDonald’s Corp. of Chicago, said that it has been impacted by “rapid swings in exchange rates, a recent spike in raw material prices, and escalating labour, logistics, and energy expenses.”
Even though inflation in the second-largest economy in Asia has stayed relatively low compared to other developed economies worldwide, it nonetheless hit a 31-year high of 2.8% in August due to rising energy prices brought on by Russia’s conflict in Ukraine and supply chain snags.
According to a poll released this month by Tokyo Shoko Research, price rises of 60% have been implemented by major Japanese restaurants due to rising manufacturing costs and the weakening yen.
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