McDonald’s to Remove Free Option from Meals Due to Rising Costs
McDonald’s is phasing out free drink refills to reduce costs, followed by other chains. Uber Eats driver Nathan Selkirk noted the change in a Pittsburgh McDonald’s. The decision corresponds to fast-food price increases, largely due to rising labor costs and regulatory impacts like California’s $20 minimum wage law. This move sets a trend for the industry. McDonald’s decision to eliminate free drink refills to cut costs, with other chains likely to follow, is linked to escalating fast-food prices driven by higher labor costs and regulations such as California’s $20 minimum wage law. This strategic shift is expected to influence the industry significantly.
By Andrew Jose May 15, 2024 at 1:07pm
Fast-food giant McDonald’s has reportedly begun phasing out free drink re-fills to cut costs — a move expected to be followed by other fast-food chains.
Uber Eats delivery driver Nathan Selkirk told Marketplace that he had recently encountered a McDonald’s restaurant in Pittsburgh, Pennsylvania, that had stopped providing customers with self-serve machines for drinks.
Instead, the restaurant, Selkirk noted, charged customers for drink refills.
Selkirk was not the only one to have noticed the recent changes
One social media user took to X to vent his frustrations over the new move by the fast-food chain.
“Anyone else think it’s wild that McDonald’s is getting rid of their self serve Soda Fountains!? Pretty wild, they’re probably no longer do free refills anymore also. What is the world coming to?” the user wrote.
Anyone else think it’s wild that McDonald’s is getting rid of their self serve Soda Fountains!? Pretty wild, they’re probably no longer do free refills anymore also. What is the world coming to?
— R3dBeard_The_Pirate (@R3dbeardP) March 13, 2024
In September, CNN reported that the fast-food chain had decided to incrementally phase out self-service soda machines for dine-in customers.
The fast-food chain aims to complete the shift by 2032, according to CNN.
News of the phase-out comes as McDonald’s and other fast food chains nationwide have increased prices.
As of early May 2024, the price hikes for fast food have exceeded overall inflation, according to reporting from CNBC.
According to one financial analyst, rising labor costs are to blame for the price hikes.
“There were increased commodity costs. We’ve seen those start to normalize,” analyst Jim Salera with the investment banking company Stephens told CNBC. “But what continues to be ahead of historical averages is the increase in labor costs that restaurants are seeing.”
With the upward pressure on prices, fast food companies are forced to balance both affordable prices to not lose customers while also making a profit amidst the rising labor costs.
California’s $20 fast food minimum wage law has been a major source of upward price pressure in the Democrat-governed state, according to The Wall Street Journal.
According to the newspaper, as soon as the law was implemented, prices soared across fast-food chains in the state.
McDonald’s cost-cutting decision is expected to set a precedent for other fast-food chains.
“McDonald’s tends to be a leader in the industry. And very often, when they make big changes, other restaurants follow suit. McDonald’s is very smart about their costs,” Darren Tristano, CEO of consulting firm FoodserviceResults, told the New York Post.
Alex Susskind, a professor at Cornell University, pointed out to Marketplace that self-serve soda machines require significant maintenance and cleaning, which can be burdensome for staff.
“The ice has to be replaced, you have to clean up the mess, you have to pick up the straw fragments,” Susskind said.
While the cost of providing free refills is minimal per drink, the cumulative expense can be substantial for a chain serving millions daily, Susskind suggested.
“Every penny is starting to matter, particularly in quick service,” Susskind said, according to Marketplace.
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