McDonald's to raise prices (commodities) [View All]

Source: MSN

As more-expensive beef and cheese squeeze margins, Ronald & Co. will pass the costs on to customers.

If you stop by McDonald's (MCD) soon, plan to spend more for your Big Mac than you're used to. Today, McDonald's said it will raise menu prices to offset the rising cost of commodities.

McDonald's CFO Peter Benson predicts commodity prices will jump 2% to 3% in 2011. And when the costs of the ground beef and cheese rise, you can bet menu items will cost you more as the Golden Arches passes on those higher prices.

Of course, it's worth noting that McDonald's isn't exactly going out of business selling cheeseburgers at a smaller margin than a year or two ago. October sales have been strong, and MCD posted an earnings increase of 10% for the third quarter.

Though prices will rise soon, it's hard to believe McDonald's will not still continue to thrive. With numerous promotions and a changing menu, MCD has succeeded in a time when many consumers are closely watching how they spend their money. And while the prices may increase, McDonald's menu options will still remain considerably cheaper than those of most other restaurants. MCD still appears to be a stock worth sinking your teeth into.



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