Reports of a McDonald’s price rise send customers in a spin: Has the fast food chain made a hash of its communication?
Thursday, March 30, 2017/
McDonald’s customers have been left in a spin by reports overnight that the price of a humble hash brown has increased to $2.20 across the country, and while some potato lovers insist they’ve always paid more than $2 for the treat, the news has sparked anger from customers across the nation.
According to The Daily Telegraph, McDonald’s staff arrived at work this morning to see the price of the chain’s hash browns had increased from $1.95 to $2.20 each.
When approached for comment, McDonald’s told the Telegraph price increases do have to occur from time to time at the store, but other than that, the company has been tight lipped on the change.
Customers of the fast food chain have responded to the reports with anger and fighting amongst themselves over the fairest price for the breakfast snack.
Some diners insist they have been paying $2.20 for hash browns ever since the fast food chain added them to all-day breakfast menus, while others say they have never — and would never —pay more than $2.00 for the product.
These customers have two arguments against price increases at fast food chains: firstly, that even a small increase in price can have a big impact on shoppers, and secondly, that businesses that are perceived to be making big profits, like McDonald’s, should not be increasing prices.
“They must be passing on their profits with wage increases for the young kids who work there…doubt it! Greedy Maccas,” one comment writer said on Facebook.
“I remember when they were 85c,” said another.
Others pointed to a McDonald’s competitor that has managed to cap the price of its hash browns, saying they will now drop into Hungry Jacks for a $1 potato treat.
“Remind people of what you’re delivering”
The case shows that even though the idea of a price rise can raise the frustration of shoppers, it’s a necessary part of operating a business, says behavioural economics specialist and founder of People Patterns, Bri Williams.
“There’s no blanket rule when it comes to whether you let people know [in advance], but if you do it without advising people, you are likely to get that shock and reaction,” she says.
Williams says large manufacturers like chocolate brands tend to accompany price rises with a change of packaging or product offering, but that won’t necessarily work for services.
And while sellers of hash browns or chocolate bars might be able to use a price increase to compensate for any drops in sales volume, small businesses that have to change pricing for more complicated products or services have more to think about, says Williams.
Given social media gives habitual purchasers of an item the ultimate forum in which to vent their frustration, Williams says it’s best to think about two things when you change a price: the context of your price change, and what your product offers to consumers.
“When it comes to pricing strategy, there’s price anchors — people assess what you’re selling relative to something else,” Williams says.
Given this, it’s important to give your customer base context to what value you are adding above and beyond competitors, and communicate this at the time of the change so that the overarching value of your product is front of mind.
“Remind people of what you’re delivering, and don’t assume that they know,” she says.
SmartCompany contacted McDonald’s Australia for clarification on the pricing issue but did not receive a response prior to publication.
All that glitters is not gold: The upsurge of paid followers and engagement on LinkedIn Sue Parker DARE Group founder
Bin juice bingers: How to avoid the sinister clutches of the procurement department and its cold benchmarking Ian Whitworth Scene Change co-founder
Locked and uploaded: How to take bricks-and-mortar stores digital with video Michael Langdon Levity director
Why retailers have no idea about the future Dean Salakas The Party People chief
There's only one way to attract and retain millennial talent — but it'll cost you a few bricks Lauren Lowe Future Fitouts co-founder
Advice for going green, from one chief executive to another James Chin Moody Sendle co-founder