Ed Rensi said inflation’s impact on the restaurant industry was ‘just insane.’
Gene J. Puskar/AP
Ex-McDonald’s CEO Ed Rensi said inflation was damaging small businesses “terribly.”
He told Fox Business the impact of rising beef and chicken prices was “just insane.”
Inflation was up by 7% year-over-year in December, the highest level since 1982.
Ed Rensi, who was CEO of McDonald’s US until 1997 and serves as an executive consultant to the chain’s franchise system, told Fox Business Friday that prices of beef and chicken had risen “so substantially.”
“Inflation is driving every restaurant in the United States absolutely crazy,” he said, adding that every small business in America was suffering “terribly from this federal inflation.”
He added: “Portion sizes are shrinking. Prices are going up. It’s just insane what’s happening in the restaurant industry,”
US inflation was up 7% year-over-year in December according to the Bureau of Labor Statistics, the highest level since 1982.
Rensi said McDonald’s had recommended “somewhere around 6, 6.5% increase next year” in prices to franchisees, who run around 90% of McDonald’s outlets.
But he added they would have the opportunity to decide their own prices “based on community need.”
The chain allowed franchise operators to sell sodas for higher prices after they were kept at a 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 has reported how fast-food chains have been grappling with rising prices by increasing prices, eliminating deals and promoting more profitable items and combo deals.
But during its fourth-quarter earnings call in January, McDonald’s CFO Kevin Ozan said its US franchise restaurants had reached record average cash flows of more than $500,000 per unit – a growth of 50% over the past three years.
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