McDonald’s franchisees, which own 18 restaurants in California, are reducing store hours, increasing menu prices and implementing renovations to offset the impact of the state’s $20-an-hour minimum wage for fast food workers. We are considering postponement.
Scott Rodrick said he needed to rethink his business strategy in the wake of a new law that took effect April 1 and spurred some fast-food rivals to increase menu prices.
“Restaurant profits and losses are being squeezed more than abnormal labor costs right now,” said Roderick, who owns 18 McDonald’s restaurants in Northern California. business insider.
“Just as domestic consumers are worried about grocery inflation, so are the restaurants that are just a basket of groceries.”
“So what I’m really dealing with, apart from the historic pace of things, is the double gun of backdoor food costs and now layoffs that are leaving a brutal mark on the profitability of my department. Leave it behind,” he added.
Mr. Rodrick had already raised prices between January and March by 5% to 7% in anticipation of the California law taking effect.
“My customers’ appetite for price increases is not unlimited,” he said.
Rodrick said he was concerned that if prices were set too high, customers would replace fast-food menus with fast-casual menus such as Chili’s or Applebee’s, offering a restaurant experience for just a few dollars more per person. expressed.
To reduce labor costs, Rodrick is reconsidering the length of business hours and whether to spend money on capital investments.
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He is also discussing delaying the renovation of the dining room at one of the McDonald’s restaurants operated through his company, Roderick Management Group.
He lamented California’s decision to raise the minimum wage only for employees at limited-service restaurant chains. The minimum wage applies to at least 60 restaurants nationwide that require payment before you eat and have no or limited table service.
“Whether you work at my drive-thru, at the bookstore down the street, or at the gas station next door, a fair starting wage for one is a fair starting wage for all.” It should be a salary,” Rodrick said. Representatives for Roderick Management Group did not immediately respond to The Post’s request for comment.
Even before the California law took effect, McDonald’s CEO Chris Kempczinski acknowledged that inflation would force the fast-food chain to raise menu prices.
McDonald’s locations in wealthy areas such as Fairfield County, Connecticut, charge about $18 for a Big Mac meal.
Another McDonald’s restaurant in Connecticut was charging customers $7.29 for an Egg McMuffin and $5.69 for a side of hash browns.
