Unhappy meals at Maccas as prices based on consumer locations

McDONALD'S is putting prices up in outer suburbs because they think consumers there are more likely to accept higher charges.

The cost of menu items was previously based on restaurant overheads but the multinational fast-food chain is now using socio-economic factors as its key criteria for determining price under a new "demand-based pricing" scheme.
A confidential corporate document obtained by The Daily Telegraph reveals that McDonald's Australia has identified an "opportunity to introduce more aggressive price increases" at dozens of stores across NSW, including Campbelltown, Doonside, Engadine, Epping, Fairfield, Gosford, Greenacre, Hurlstone Park and Liverpool.
A McDonald's franchisee said the biggest price hikes were concentrated in lower income areas around Australia.
"If you take the time to analyse the different restaurants, in general the poorer suburbs will pay more," the franchisee said.
"This is so very, very wrong."
The document said the objective of the new system was for individual stores "to maximise the potential for a price rise" while minimising the risk consumers will go elsewhere or choose a cheaper meal.
The biggest price hike will be for children's Happy Meals at all locations across Australia.
A standard Happy Meal will increase by 16.5 per cent in May, from $4.25 to $4.95.
Other menu items will rise in two stages by between 1.8 per cent and 3.3 per cent, depending on the location of the restaurant. The first stage of the price rises has already been implemented while the second will occur in May.
McDonald's corporate communications manager Bronwyn Stubbs denied the prices were forced on franchise owners and said by implementing demand-based pricing "the Australian approach has been brought into closer alignment with McDonald's global practice".
"The company's restaurants have always, and continue to have, the power to set their own pricing based on individual factors," she said.
Spokesman for consumer group Choice Christopher Zinn said he was surprised McDonald's would raise prices during tough economic times.
"It's a fascinating insight into the corporate culture of McDonald's that they believe they can get price rises through by doing it in two stages," he said.

Source: The Daily Telegraph