UNEXPECTEDLY: McDonald’s, Chipotle to raise menu prices in California next year as fast-food wages rise to $20.
McDonald’s has not decided how much it will hike prices in California as workers’ wages rise to $20 an hour, CEO Chris Kempczinski said Monday. Chipotle expects it will raise prices by a “mid-to-high single-digit” percentage in the state, but has not made a “final decision,” its Chief Financial Officer Jack Hartung told analysts on the company’s conference call Thursday.
Restaurants have been hiking menu prices for more than two years in response to rising ingredient and labor costs. Prices for food away from home were up 6% in September compared to a year ago, according to the U.S. Bureau of Labor Statistics.
While diners are already used to paying more for their meals, some have been eating out less often to mind their budgets. McDonald’s executives said Monday that consumers making under $45,000 have been visiting less frequently, contributing to a dip in its U.S. traffic this quarter.
In September, the restaurant industry and labor groups ended an expensive, monthslong battle over a bill that would have created a 10-person council that governs fast-food chains in California by setting guidelines for working conditions and wages.
McDonald’s employees would have to work a little over 56 weeks (no vacations) to earn $45,000 — almost enough to belong to the elite group of earners who had to cut back on McDonald’s even before the next price hikes go through.