McDonald's Malaysia to make impactful decisions as costs rise

McDonald's Malaysia to make impactful decisions as costs rise
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KUALA LUMPUR (May 27): McDonald's Malaysia said the fast-food restaurant chain is facing higher operating costs and that it will continue to assess the situation to make impactful and effective business decisions while providing continuous value to its customers.

"McDonald's Malaysia, as with all businesses in the country, are facing higher operational costs. What we are fortunate to have is a robust supply chain and strong relationships with our suppliers and partners.

"We will continue to assess the situation in order to make impactful and effective business decisions, while providing continuous value to our customers," McDonald's Malaysia vice president and chief marketing officer Melati Abdul Hai said in a statement in response to theedgemarkets.com's enquiries.

Melati did not elaborate.

She was responding to theedgemarkets.com's enquiries on how the the ringgit's weakening against the US dollar and Singapore dollar, implementation of Malaysia's RM1,500 minimum monthly wage effective May 1, 2022 and costlier food expenses would impact McDonald's Malaysia's business decisions, which include prospects of price hikes at McDonald's Malaysia's outlets.

According to McDonald's Malaysia's press release, US-based McDonald's Corp is the world's leading food service retailer with approximately 36,000 restaurants worldwide and that the global company serves more than 70 million customers daily in more than 100 countries.

"With 40 years of presence in Malaysia, McDonald's serves over 13.5 million customers a month at more than 300 restaurants nationwide. McDonald's [Malaysia] employs more than 15,000 Malaysians in restaurants across the nation," McDonald's Malaysia said.

According to McDonald's Malaysia's website, McDonald's first restaurant in Malaysia was opened along Jalan Bukit Bintang here in April 1982.

In December 2016, Saudi Arabia's Lionhorn Pte Ltd became the owner of McDonald's Malaysia through the McDonald's Developmental Licensee franchising structure.

The ringgit has weakened against the US dollar and Singapore dollar.

Against the US dollar, the ringgit weakened past 4.4 for the first time since the onset of the Covid-19 pandemic in March 2020 on May 19, 2022 against a strengthening US dollar, in anticipation of US interest rate hikes to fight inflation.

Compared to the Singapore dollar, the ringgit has this week (May 22 to 28, 2022) weakened past 3.2 for the first time.

The ringgit has at the time of writing on Friday (May 27, 2022) strengthened against the US dollar and Singapore dollar at 4.3785 and 3.1974 respectively.

Malaysia's inflation, as measured by the consumer price index (CPI), increased 2.3% in April 2022 from a year earlier, led by higher food prices, according to the Department of Statistics Malaysia (DOSM) on Wednesday (May 25, 2022).

"The increase in food inflation, which contributed the highest [weightage] to the overall weight of [the] CPI, remained to be a major contributor to inflation.

"Inflation for this group increased 4.1% in April 2022 as compared to the same month of the previous year," DOSM chief statistician Datuk Seri Dr Mohd Uzir Mahidin said in a statement.

Chong Jin Hun