While McDonald's is raising prices, local competitors with lower transaction value, such as Chinese-style hamburger Tastien, are expanding rapidly.
Photo by Kuang Da
By LI Ye
McDonald's has raised prices in China by around 3 percent, blaming higher operating costs. A typical meal deal is up by 0.5 yuan, (7 US cents) membership meals increased by 1 yuan. Similar adjustments occurred two years ago.
Yum China, the owner of McDonald's main rival KFC, reported a 9-percent increase in food and packaging costs this year, a 6-percent increase in rents, and a 16-percent increase in salaries. The price of chicken was up 6.5 percent in H1, affected by the bird flu pandemic and the recovery of the restaurant industry.
While McDonald's is raising prices, local competitors with lower transaction value, such as Chinese-style hamburger Tastien, are expanding rapidly. Tastien has 6,600 stores nationwide, with nearly half of them in third-tier or lower cities. The average spend is 16.5 yuan per person, significantly lower than McDonald's combo prices.
Currently, McDonald's is still increasing its investment in China to reach 10,000 restaurants by 2028.