McDonald’s isn’t saying, but some restaurant chains have already begun to scale back on egg use as prices remain high.
In June, Texas-based Whataburger trimmed its breakfast hours to cut down on the number of eggs it went through. Dunkin’ Donuts has already scrapped an eggy promotion it had on the calendar for later in the year.
Some supermarkets are saying the high retail prices for eggs (wholesale prices have more than doubled since the beginning of the year and are expected to keep going up) are keeping retail demand down, but if McDonald’s suddenly needs to significantly increase its egg-buying to make sure it can meet McMuffin demand, it could drive the price even higher.
The question is whether huge buyers like McDonald’s are feeling the same price-tag pain that egg-loving consumers are.
CNBC notes that a company likes McDonald’s most likely has contractually locked in its price for eggs for the near future, but these agreements are not for the long term.
“Most are only going to contract three to six months because it’s a volatile commodity, and you never want to get yourself locked into all of it,” one analyst explains to CNBC.
Another analyst says some chains haven’t seen any change yet to their egg-buying ability, while others are paying more, and yet another group is “completely exposed to the open market… struggling to source full need.”
Ultimately it will come down to whether McDonald’s egg suppliers’ birds are impacted by the flu, which may spread during the upcoming migratory season.
As sales at McDonald’s have continued to sink, the hype about all-day breakfast has been the one potential bright spot for the company’s future. So it might be the case that McDonald’s will have to suck up any higher egg costs now to make all-day breakfast a reality that could help the company later.
by Chris Morran via Consumerist
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