Senators call on McDonald’s CEO to explain menu price hikes

Democratic lawmakers have called on McDonald’s (NYSE:MCD) CEO Chris Kempczinski to disclose how the fast-food chain decides menu prices, which they claim have outpaced inflation and are squeezing customers.

“While McDonald’s is not the only fast food restaurant that has increased prices significantly in recent years, its dominant market position as the largest fast food chain in the U.S. has an outsize impact on American consumers,” Senators Elizabeth Warren (D-MA), Bob Casey (D-PA) and Ron Wyden (D-OR) wrote in a letter to Kempczinski.

McDonald’s USA President Joe Erlinger previously blamed menu price hikes on inflationary pressures. “… but the data tells another story. Since the COVID-19 pandemic, fast food prices have consistently outpaced inflation,” the senators’ letter read.

The lawmakers said McDonald’s (MCD) annual income grew nearly $8.5B from 2020 to 2023, and it spent around $7B on stock buybacks in 2022 and 2023.

“The company also benefits from a tax loophole that favors buybacks,” they added, saying this prioritizes shareholders over investments in its own business and workers.

“Corporate profits must not come at the expense of people’s ability to put food on the table,” the senators concluded. “As we seek to investigate and understand the increased consumer costs, we hope McDonald’s will help us to understand why its prices have risen so high.”

McDonald’s (MCD) responded by saying the letter “demonstrates a lack of understanding of our franchise business model and contains contortions of facts and many inaccuracies.”