Coffee beans skyrocketed! There's a coffee shop that dares to buy a dollar of coffee?!
In this era of soaring inflation, coffee shops in various regions and brands have adjusted the pricing of their products to a high level. However, McDonald's in the United States still sells $1 worth of coffee. How long can such a low price last in an era of high inflation?
McDonald's says the $1 product covers all cups of high-quality roasted and iced coffee. With the rising cost of labor, transportation and raw materials, McDonald's will pay for good pricing and increasingly high costs. (after all, the price as low as $1 does not limit the number of cups, who would not choose the maximum)
The chain could incur losses as a result. Consumers who regularly patronize McDonald's may buy more than one item, and low-priced coffee can be paired with any of the options in the all-day breakfast package. Depending on the sales of the second item, McDonald's is likely to profit from such a deal.
The first challenge McDonald's faces is transportation costs. Many of the trucks used by the American transportation industry are powered by diesel, and diesel prices have risen by 50% in the past year.
The second is that the price of coffee has reached record highs many times since the epidemic, which is closely related to the decline in the harvest in coffee-producing areas. According to the Coffee Finance Network, the drought in Brazil's coffee producing areas is worse at this stage than in the same period in 2021, which not only brings a lot of uncertainty to Brazilian Arabica production this year, but also may further affect coffee production next year.
-- performance of rainfall in coffee-producing areas of Brazil in the past 30 days
At the same time, McDonald's in the United States is facing rising labor prices. Some employees earn as little as $13 an hour. McDonald's says employees in many stores will be paid $15 an hour by 2024. According to CNN, the u.s. consumer price index rose to 9.1% in June 2022, and McDonald's is now under pressure to raise hourly wages for its employees.
McDonald's is not the only retailer under pressure from inflation, but McDonald's in the United States still sells $1 worth of coffee to consumers.
In such an environment, the operation of not raising the price of coffee is not common. The coffee shop mentioned on July 14 that a perennial patron of McCoffee in Sydney, Australia, told 7News that he spent A $5.30 on a medium latte at McDonald's, up from A $5.05 the previous day at the same restaurant.
At present, the global environment has brought obvious pressure to various industries, oil prices, energy prices skyrocketing, making countries increasingly serious through expansion, and finally chain brands will increase commodity prices, part of the cost pressure on consumers.
Previously, McDonald's in Canada also offered consumers any cup of coffee at a price of one yuan, which was later cancelled. Until February 2022, McDonald's in Canada resumed the C $1 coffee package. However, according to a number of Canadian media reports, the event is a time-limited activity, and one Canadian dollar can only get a medium cup of coffee.
How long do you think a $1 cup of coffee at McDonald's in the United States will last?
Photo Source: coffee Finance Network, CNN, Internet
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