Inflation is driving US restaurants ‘crazy’: former McDonald’s CEO

  • Former McDonald’s CEO Ed Rensi said inflation was hurting small businesses “terribly”.
  • He told Fox Business the impact of higher beef and chicken prices was “just insane”.
  • Inflation rose 7% year-on-year in December, its highest level since 1982.

A former McDonald’s CEO says inflation is driving every restaurant in the United States “absolutely insane” and its effects have been “insane”.

Ed Rensi, CEO of McDonald’s US until 1997 and executive consultant of the chain’s franchise system, told Fox Business Friday that beef and chicken prices had risen “so substantially”.

“Inflation is driving every restaurant in the United States absolutely nuts,” he said, adding that every small business in America was suffering “terribly from this federal inflation.”

He added: “Portion sizes are going down. Prices are going up. It’s just insane what’s going on in the restaurant industry,”

Inflation in the United States rose 7% year over year in December according to the Bureau of Labor Statistics, the highest level since 1982.

Rensi said McDonald’s recommended “about 6, 6.5% increase next year” in prices to franchisees, who operate about 90% of McDonald’s outlets.

But he added that they would have the flexibility to decide their own prices “based on the needs of the community”.

The chain has allowed franchisees to sell sodas at higher prices after they were kept at one dollar for several years as part of a nationwide promotion, The Wall Street Journal reported earlier this week.

McDonald’s did not immediately respond to Insider’s request for comment.

Insider’s Mary Meisenzahl reported how fast-food chains have grappled with rising prices by raising prices, eliminating deals, and promoting more profitable items and combo deals.

But on his fourth-quarter earnings call in January, McDonald’s chief financial officer Kevin Ozan said its U.S. franchise restaurants achieved record average cash flow of more than $500,000 per unit, a growth of 50% over the past three years.

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