Inflation bites: McDonald’s UK raises price of 99p cheeseburger

Popular menu item will increase 20 per cent to £1.19, the first increase in 14 years

McDonald's will increase prices by 10p to 20p for items that have been hit by rising costs. AP

McDonald's is to increase the price of its cheeseburger by 20 per cent in Britain, as the cost-of-living crisis squeezes the country.

The cheeseburger's price will rise to £1.19 ($1.43) from 99p — the first price increase for the popular item in 14 years, as the burger chain responds to soaring inflation.

McDonald's will also increase prices by 10p to 20p for other items that have been hit by rising costs, the burger chain's UK chief said on Tuesday.

Inflation in the UK has soared in the past year to about 9 per cent and each month new highs are achieved. Overall UK shop price annual inflation accelerated to 4.4 per cent in July, up from 3.1 per cent in June.

Reckitt, the maker of Dettol and Nurofen painkillers, said it raised its prices by 9.7 per cent in the second quarter and yet volumes still grew by 2.2 per cent, and said it expects inflation on cost of goods sold to remain in the high teens for the full year.

Unilever, the owner of brands including Marmite, Ben & Jerry’s, Domestos and Dove, yesterday announced it had raised its prices by 11.2 per cent in the last quarter and would pass on more cost increases throughout the year.

McDonald’s UK & Ireland chief executive Alistair Macrow said the increases are needed to help the business cope “through incredibly challenging times”.

“Just like you, our company, our franchisees who own and operate our restaurants, and our suppliers are all feeling the impact of rising inflation,” he said in an email to customers. “At times like this, we know that providing great value is important.

“Since we opened in the UK in 1974, we have committed to offering great tasting food at affordable prices, and that commitment will not change.

“But, today’s pressures mean, like many, we are having to make some tough choices about our prices.”

The increase, which will take the cheeseburger above the psychologically important price point of £1, comes as British consumer price inflation hovers around 40-year highs and is forecast to top 11 per cent in October.

Mr Macrow said the increases had been delayed for as long as possible, and that the company was still committed to keeping prices affordable.

The restaurant chain, which has its headquarters in Chicago and runs more than 36,000 restaurants in more than 100 countries, raised US prices by 6 per cent last year, in line with increases at other consumer-focused companies that are facing higher inflation amid strong post-pandemic demand and supply chain disruption.

The British Retail Consortium said on Wednesday that shops and supermarkets had increased prices by 4.4 per cent in the 12 months to July, the largest rise since these records began in 2005.