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McDonald’s, Chipotle to raise menu prices in California next year as fast-food wages rise to $20

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McDonald’s, Chipotle to raise menu prices in California next year as fast-food wages rise to


Chipotle and McDonald’s fast-food restaurants in Chinatown in Washington, D.C.

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McDonald’s and Chipotle Mexican Grill will raise their menu prices in California next year to offset the state’s minimum wage increase for fast-food workers, executives said as both chains announced quarterly earnings in recent days.

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McDonald’s has not decided how much it will hike prices in California as workers’ wages rise to $20 an hour, CEO Chris Kempczinski said Monday. Chipotle expects it will raise prices by a “mid-to-high single-digit” percentage in the state, but has not made a “final decision,” its Chief Financial Officer Jack Hartung told analysts on the company’s conference call Thursday.

Restaurants have been hiking menu prices for more than two years in response to rising ingredient and labor costs. Prices for food away from home were up 6% in September compared to a year ago, according to the U.S. Bureau of Labor Statistics.

While diners are already used to paying more for their meals, some have been eating out less often to mind their budgets. McDonald’s executives said Monday that consumers making under $45,000 have been visiting less frequently, contributing to a dip in its U.S. traffic this quarter.

In September, the restaurant industry and labor groups ended an expensive, monthslong battle over a bill that would have created a 10-person council that governs fast-food chains in California by setting guidelines for working conditions and wages.

Instead, the two sides settled on a compromise: a nine-person council that only has the power to set the pay floor for the fast-food industry in the state through 2029. Chains with at least 60 locations nationwide will have to pay their workers at least $20 an hour, starting April 1. Between 2025 and 2029, the appointed council will have the authority to raise the hourly minimum wage annually by whichever is lower: 3.5% or the annual change in the consumer price index.

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For Chipotle, the new pay floor means it will hike its wages roughly 18%. Hartung said the chain’s average wage in the state is currently $17 an hour.

As wages rise, Chipotle customers will pay much more for their burritos and bowls in California, which is home to roughly 15% of Chipotle’s restaurants — and the company’s headquarters.

The chain has already raised prices four times since June 2021. The most recent price increase of 3% happened earlier in October.

At McDonald’s, price increases will only be one method to offset the higher labor costs. The chain will likely also look at ways to improve productivity to cut restaurant-level costs, Kempczinski said Monday.

Unlike Chipotle, which owns the overwhelming majority of its locations, most of McDonald’s California locations are run by franchisees. They have the freedom to decide prices, although the chain provides advice on the best strategy. Just under 10% of McDonald’s U.S. restaurants are located in California.

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The burger chain anticipates that operators there will feel the pain of the wage hike in the short term.

“There will certainly be a hit in the short term to franchisee cash flow in California,” Kempczinski said on the company’s conference call, adding that it’s unclear at this point how big the blow will be.

The National Owners Association, an independent advocacy group of more than 1,000 McDonald’s U.S. franchisees, projected the bill will cost each restaurant in the state $250,000 annually, according to a September memo viewed by CNBC. McDonald’s, which dealt with franchisee backlash for its role in the compromise’s negotiations, declined to comment at the time on the NOA’s estimates.

In the long term, McDonald’s thinks that the higher wages could be a boon to its business.

“We believe we’re in a better position than our competitors to weather this, so let’s use this as an opportunity to actually accelerate our growth in California,” Kempczinski said.

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California

Over 650 California dairies under quarantine in effort to prevent bird flu spread

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Over 650 California dairies under quarantine in effort to prevent bird flu spread


TULARE COUNTY, Calif. (KFSN) — California state agencies say most dairies in the state are under quarantine because of the bird flu.

Now, they are working alongside each other with local dairy farmers to help reduce exposure to H5N1 between infected cows and people.

Over 650 of the 984 dairies in the state are under quarantine because of a growing bird flu outbreak.

Although the California Department of Public Health says the risk remains low for the general public the virus kills 90% to 100% of infected poultry and about 1% to 2% of cows.

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“So, while it does impact dairy herds, and it’s definitely devastating to the herd managers compared to how it acts in poultry it’s much less severe,” says Dr. Annette M. Jones, the state veterinarian and director of the animal health and food safety services with California Department of Food and Agriculture.

In Southern California more dairies have recently tested positive for the bird flu.

The health department and California Department of farm and Agriculture say they have also seen cases in cats.

“LA County has reported two domestic cats who have been confirmed to have consumed raw milk that was infected. We’re seeing a lot of neurological diseases and feline species with this particular virus,” mentions Dr. Erica Pan, the California State Epidemiologist and Deputy Director for the Center for Infectious Diseases at the California Department of Public Health

Doctors also confirm some wastewater in the state has tested positive for the virus.

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“A lot of the pasteurized milk that can be PCR positive, you know, and again, we know pasteurized milk is safe, any virus fragments in there are not infectious, but they can still test positive in the wastewater,” explains Dr. Erica Pan.

“So, we think actually a lot of our wastewater detections are from residential or other commercial milk dumping or down in the sinks.”

So far, the state has handed out over four million pieces of PPE and says the state of emergency declaration allows them to expand their workforce and better monitor and respond to situations.

“We are really focusing on those who are at highest risk, which is people working with infected animals. Which is why we are focusing as well on education outreach and providing personal protective gear. The only other tip I would remind people to do is avoid touching wild sick animals, or dead animals,” says Dr. Pan.

For news updates, follow Kassandra Gutierrez on Facebook, Twitter and Instagram.

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Atmospheric river update: 25-foot waves to hit California

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Atmospheric river update: 25-foot waves to hit California


What’s New

An incoming atmospheric river will bring 25-foot waves to the coastline in central California early next week, as well as heavy rain and strong winds.

Why It Matters

The Pacific Northwest is known for its atmospheric rivers, particularly during the winter months. The storms bring heavy rain and snow, typically to Oregon, Washington and California. Though the moisture-laden storms can help alleviate drought, they also pose life-threatening risks from mudslides and floods.

Back-to-back atmospheric rivers have already hit the West Coast this month, including one that brought heavy rain and strong winds to Washington and Oregon earlier this week.

Another few storms will barrel into the West Coast this weekend, with meteorologists expecting their impact to stretch further south into California. In addition to precipitation, the storm will spur large, dangerous waves that will break along the coast.

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Heavy surf created by a large storm in the Gulf of Alaska sends huge waves crashing along the coastal rocks and shoreline on February 4, 2016, near the Piedras Blancas Lighthouse, California. A high…


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What to Know

The high surf advisory will go into effect early Saturday morning. It stretches from Cloverdale to Monterey, according to a map from the National Weather Service (NWS).

Some of the advisories expire on Sunday, though the high surf advisory issued by the Los Angeles NWS office will remain in effect throughout next week.

Large, breaking waves are possible, along with dangerous rip currents. The biggest threat for large waves will be on west and northwest-facing beaches.

The highest forecast waves could hit up to 25 feet tall for Central Coast beaches from Monday into Tuesday. Waves will likely be smaller for the Santa Barbara South Coast beaches, reaching up to 12 feet on Monday and Tuesday. Ventura County beaches could see breaking waves of 8 to 12 feet with local set as high as 17 feet on Monday night into Tuesday.

What People Are Saying

NWS meteorologist Devin Black told Newsweek: “The storm system is generating winds. Pacific systems that come through our area tend to build way back west, and that allows the swells to really build.

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Average waves for Central Coast beaches are around 5 to 8 feet this time of year, meaning the incoming waves will be “pretty significant.”

NWS Los Angeles in a high surf advisory: “There is an increased risk for ocean drowning. Rip currents can pull swimmers and surfers out to sea. Large breaking waves can cause injury, wash people off beaches and rocks, and capsize small boats near shore.”

NWS San Francisco in a hydrologic outlook: “The storm door is wide open with a very active storm track forecast to impact Northern California. Wet and unsettled weather will bring periods of light to moderate rainfall to the region with the biggest impact expected over the North Bay.”

What Happens Next

The storms expected to hit the Golden State this weekend will “prime the soils” for storms to come later next week, potentially leading to dangerous water rises in area creeks and streams, the hydrologic outlook warned. Residents in the impacted area are urged to keep an eye on NWS weather alerts as the storms arrive, given that the storm set to hit Monday is “gearing up to be the strongest and wettest of the series.”

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California suffers exodus as over 200,000 Americans leave state in one year

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California suffers exodus as over 200,000 Americans leave state in one year


What’s New

More Americans left California between 2023 and 2024 than any other state across the country, according to new data released by the Census Bureau.

The Golden State lost a total of 239,575 residents to other states, the largest net domestic migration loss in the country over the past year. New York, another blue bastion in the country, saw the second-highest loss, losing a total of 120,917 residents between 2023 and 2024.

Why It Matters

The findings confirm an ongoing trend in the Western U.S. and specifically the Golden State, which has lost thousands of residents to the South in recent years, especially during the pandemic.

The California population drain, according to research compiled by the Institute for Economic Policy Research (SIEPR), is mainly due to people’s desire to live in more affordable places: several studies have found that the cost of housing alone is a key reason for people to leave the Golden State.

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A person walks down a residential street on August 04, 2022, in Los Angeles, California. More Americans left California between 2023 and 2024 than any other state across the country, according to new data…


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California is among the top five states with the highest overall cost of living in the country, SIEPR reported. The median sale price of a home in the state, according to Redfin’s latest data, is $831,300, up 4.7 percent compared to a year earlier. That was nearly double the nationwide median sale price of a home at $430,010.

Most of those who’ve left California in recent years have gone to states like Texas and Arizona—a red state and a swing state, respectively. President-elect Donald Trump won both in November. Two-thirds of those who moved out of California told SIEPR that they didn’t do so because of politics, but the political impact of their decision is undeniable. One quarter told the institute that they had moved explicitly for political reasons.

What To Know

Where California is losing, Texas is gaining. The Lone Star State continues to welcome new residents and lead the country with the largest net domestic migration gain between 2023 and 2024, totaling 85,267 new residents over the past year. Texas has several benefits attracting people that California doesn’t offer: the state has no income tax, it’s cut off from the Western Interconnection electric system and has been building more new homes, whereas the Golden State is still going through a homelessness crisis and a housing shortage.

Overall, the U.S. population grew by nearly 1.0 percent between 2023 and 2024, surpassing 340 million in total. This population growth, the fastest the country has seen in a year since 2001, was mainly due to rising net international migration, the bureau reported. Net international migration refers to any change of residence across U.S. borders.

Newsweek contacted the Census Bureau for comment by email on Friday morning.

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What People Are Saying

“California is no longer the preferred destination it used to be,” Hans Johnson, a demographer at the nonpartisan Public Policy Institute of California, told the Los Angeles Times in April, discussing the issue of people moving out of the Golden State.

What’s Next

It’s not all gloom and doom for California. The state was among 47 including the District of Columbia which experienced population gains of over 100,000 people between 2023 and 2024, adding a total of 232,570 residents in the past year. Despite the fact the state is trailing Texas and Florida, it still reported the third-highest numeric increase in the nation.

The Golden State had the second-highest increase in births outnumbering deaths (what’s known as natural increase) after Texas, at 110,466.

Together with Florida (411,322) and Texas (319,569), California saw one of the largest gains from international migration, at 361,057. Net international migration refers to any change of residence across U.S. borders.

The Golden State was also the most populous in the country, with an estimated population of 39,431,263 residents as of July 1, followed by Texas with 31,290,831 and Florida with 23,372,215.

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Overall, the U.S. population grew by nearly 1.0 percent between 2023 and 2024, surpassing 340 million in total. This population growth, the fastest the country has seen in a year since 2001, was mainly due to rising net international migration, the bureau reported.

Should it continue, California’s population drain could drastically change the state’s job market and fiscal outlook, as well as cause the state to lose further congressional seats.

Have you left California for another state in the past few years? We’d love to hear your story. Contact g.carbonaro@newsweek.com



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