3 Ways McDonald’s Budget Cuts Have Not Translated To Price Cuts for Customers’ Wallets
Written by
Seychelle Thomas
Edited by
Amen Oyiboke
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Many Americans are tightening their belts in the face of higher prices, and McDonald’s has been cutting back their spending too. But that might not mean you’ll see lower prices on the menu the next time you visit the Golden Arches.
In 2024, McDonald’s reported a decline in net income from 8.4 billion to 8.2 billion year-over-year after consumers recoiled at the fast food chain’s rising prices and an E. coli outbreak. However, the company has plans to target packaging, toys, and waste as part of its strategy to reduce costs and strengthen its circular economy.
According to the latest consumer price index from the Bureau of Labor Statistics, the cost of food away from home has increased by 3.7% since last year, for a total of 28.5% higher than pre-pandemic prices. For some items at McDonald’s, the price hike is even higher. McDonald’s estimates that the average price of its menu items is up by about 40% over the past five years.
Reducing Plastic in Happy Meal Toys
A happy meal from McDonald’s is a go-to for busy parents looking to feed their kids after extracurriculars — or at least it used to be. Today, a 4-piece chicken nugget Happy Meal costs $4.99, but it wasn’t long ago that it cost just $3.99 in 2020. That’s an increase of 25%.
McDonald’s has made an effort to reduce the amount of fossil fuel-based plastics in Happy Meal toys and has been relatively successful. Since 2022, they’ve reduced those plastics by over 47%, and by 2023, they improved further with a reduction of over 63% in their Happy Meal toys. However, Happy Meals haven’t gotten any less expensive with the change in materials.
Recycling and Composting
According to McDonald’s 2024 Purpose and Impact report, over 88% of their restaurants with advanced infrastructure gave customers the chance to recycle or compost their packaging. It’s part of their focus on a “circular economy” designed to recycle and repurpose the packaging used in its restaurants rather than using new materials. By the end of 2025, McDonald’s aims to source 100% of its guest packaging from renewable, recyclable or certified sources. If McDonald’s is truly creating a circular economy where they spend less on new materials to package their foods, then why has the average price of a Big Mac increased by 21% from 2019 to 2024?
Reducing Food Waste
As part of its strategy, McDonald’s says it is taking steps to reduce the amount of food waste across its supply chain and restaurants. However, the fast food giant hasn’t been the most transparent about just how much food waste it creates.
The company has even gone as far as to block a proposal that would require it to supply a food waste transparency report to its shareholders. So even if they have managed to cut costs by reducing food waste, we’ll never know exactly how much. Making it nearly impossible to connect any cost savings to a drop in menu prices.
Is McDonald’s making changes and shaving down its budget? The short answer is yes. However, you’ll be hard-pressed to see those savings on your next trip to the drive-through. The once budget-friendly burger giant has raised its prices considerably over the past five years while touting progress in transitioning to more sustainable business practices. Unfortunately, it seems that all that progress won’t make your Quarter Pounder any more affordable.
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