By On Thursday, Sen. Elizabeth Warren (D-Mass.) openly criticized McDonald’s for increasing prices at a rate that outpaces inflation, making it harder for Americans to afford everyday meals. She expressed her frustration on social media, stating that corporate profits should not come at the cost of people’s ability to feed their families.
Fast Food Prices Soar While Profits Climb
McDonald’s, along with other fast food chains, has faced significant scrutiny for its pricing strategy. In a joint letter addressed to McDonald’s CEO Chris Kempczinski, Senators Elizabeth Warren, Bob Casey (D-Pa.), and Ron Wyden (D-Ore.) pointed out that McDonald’s holds a unique market position in the U.S. As such, the chain’s pricing decisions deeply affect working families.
While inflation has been a global issue since the pandemic, McDonald’s has consistently increased its prices beyond the inflation rate. According to the letter, overall inflation has risen by 20% since 2020, but McDonald’s menu prices have climbed at an even steeper rate. This has occurred while the company’s net annual income surged by over 79%, reaching nearly $8.5 billion from 2020 to 2023.
But what about the consumers? The Senators argue that McDonald’s price hikes have disproportionately affected the most vulnerable, making basic meals a financial strain. These accusations come at a time when many Americans are still trying to recover from the economic hardships caused by the pandemic.
A $7 Billion Stock Buyback Raises Questions
While McDonald’s claims rising input costs as a reason for price increases, its corporate behavior suggests other motives at play. McDonald’s has been spending heavily on stock buybacks—almost $7 billion between 2022 and 2023. This has drawn criticism, with lawmakers accusing the fast food giant of prioritizing Wall Street over its workers and customers. The Senators highlighted that McDonald’s is using a tax loophole that benefits corporate buybacks, further enriching shareholders while avoiding investments in the company itself.
This stock buyback practice, while common in corporate America, adds to the growing frustration around income inequality. Many believe McDonald’s could have better used those billions to invest in improving wages, working conditions, or lowering its prices.
McDonald’s Under Fire For Price Increases And Health Scares
The price hike is just one of McDonald’s ongoing problems. In recent years, the company has faced backlash over several high-profile issues, from inflation-driven menu prices to health concerns.
In 2022, franchisees began raising drink prices, citing inflation and supply chain problems. By 2024, these price hikes became impossible to ignore, with some menu items seeing a price increase of over 200%. On top of that, a recent E. coli outbreak, linked to McDonald’s signature Quarter Pounder burgers, has only added to the company’s woes. The outbreak has led to a fast-moving investigation by the Centers for Disease Control and Prevention (CDC), putting McDonald’s in the hot seat once again.
McDonald’s Stock Remains Steady
Despite the controversies, McDonald’s stock has remained largely stable. On Thursday, the stock traded 1% higher, closing at $301.58 during the regular session. However, the company has seen some pressure due to the ongoing health concerns related to the E. coli outbreak.
With criticism mounting from lawmakers and consumers alike, McDonald’s must decide whether it will address these issues head-on or continue to focus on maximizing profits. For now, the company has chosen not to respond publicly to these concerns.