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Dubai: The cost of a Big Mac along with its brethren may increase as parent McDonald's deals with rising global food prices, transportation and living costs, along with a weaker dollar.
Rafic Fakih, managing director of McDonald's UAE, told the press at the second launch of its Open Door Initiative that the company may have to raise prices to offset the cost of doing business.
"Costs have risen 30 per cent since last year. The food cost is only one element to business. There is the cost of transporting the goods, real estate [among others]," he said.
"Right now we're operating at squeezing point."
McDonald's UAE imports most of the ingredients and materials used to make its burgers, salads and other products from countries as far away as Sri Lanka and Malaysia.
The weaker dollar, which the UAE dirham is pegged to, has increased the price of goods in other countries. The cost to ship the goods to the UAE has also increased because of oil prices have increased in consequence.
On top of that, operational costs for McDonald's UAE have increased, as it has to pay rent for 50 out 52 branches it operates. The other two branches are in premises the company owns outright. Despite the squeeze, Fakih said the company has not applied for price increases to the Ministry of Economy.
"We are hoping the prices will go down because we don't want to hurt our customers," he said.
He added McDonald's had not increased their prices since 2006.
This is not the first time a fast food company in the UAE is considering increasing its prices. Last month, Kentucky Fried Chicken, Pizza Hut, Southern Fried Chicken and Hardee's increased their prices by as much as 30 per cent, citing rising operational costs.
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