McDonald’s Philippines to raise prices but ‘below inflation’ in 2019

The McDonald’s franchise holder in the Philippines is increasing prices of selected products, starting 2019 to meet rising food costs, but the increase would be lower than the inflation rate.

“Given the increase in food cost, there will be an increase next year. But we usually increase never above inflation,” McDonald’s Philippines executive vice president and managing director Margot Torres told reporters in a press briefing in Taguig City on Wednesday.

Inflation clocked in at 6.7 percent in September, the fastest since February 2009, largely driven by spikes in prices of food items.

The food and non-alcoholic beverages index rose to a nine-year high of 9.7 percent.

McDonald’s Philippines president and CEO Kenneth Yang said the company is now reviewing its pricing plan for next year.

“But we try to be below inflation. We try to absorb some of the increases so we will not pass all the increases on to our customers,” Yang said.

The pricing strategy is related to rising food costs, Torres noted.

“Let’s say the projected inflation is 6.7 percent for the full-year. So when we increase our prices we look at a strategy na we never increase above inflation or not even close,” Torres said.

“Meron kaming tinatawag na consumer price index, binabatayan namin ‘yung increases ng prices ng basket of goods ng consumers tapos ‘di kami lalagpas dapat diyan. Otherwise, it goes against the whole business essence of McDonald’s to stay affordable,” she said.

Torres said McDonald’s looks at its menu items to determine which meals or products will increase and which will remain the same.

“Not everything increases across the board. We also choose the items that we believe are not price sensitive. And then we even commit to items, to not increase their price; and keep it at a price point, because it is purchased by the mass market. We have done that through the years,” she said.

“For example, the McSavers meal, that have been P59 for many years, tumaas nalang siya ng P65 nung tinamaan kami ng sugar tax, pero ‘di pa rin namin ginagalaw despite the increase in bigas, inflation, it is still at P65,” Torres noted. —VDS, GMA News