マクドナルド: Updated on Dec. 23

Source:  https://mainichi.jp/english/articles/20211222/p2g/00m/0bu/034000c

Article:

TOKYO (Kyodo) -- McDonald's Co. (Japan) will only offer french fries in small sizes as potato imports from North America have been delayed due to flooding near a Vancouver port and a worldwide logistics disruption caused by the COVID-19 pandemic.

The sale of medium- and large-size fries will be stopped from Friday to Dec. 30 as the potato supply falls, McDonald's said in a statement on Tuesday. The hamburger chain continues to sell small-size offerings as it tries to make sure customers can enjoy the popular item despite the shortage.

McDonald's said it is expediting the procurement of potatoes and plans to put medium- and large-size fries back on the menu by 10:30 a.m. on Dec. 31.

The suspension will take place at about 2,900 stores nationwide. The supply issue will not affect its hash brown offerings, the company said.

Ideas:

All week long in Japan, in the newspapers and on TV, the talk has been about McDonalds and the shortage of potatoes for french fries.

In normal supply/demand economic theory, a supply shortage would shift the supply curve to the left resulting in a new equilibrium price, which is now higher.

So you would expect that McDonalds would increase the prices of it fries in order to maintain profits during a shortage.

Even though McDonalds plans to stop selling the medium and large-size fries the article doesn't say anything about if they are going to change the prices of the smaller-size fries.

As this is the holiday season most likely there will be an increase in demand too, so we would see in regular economic supply/demand theory a shift the both the demand curve and the supply curve but again resulting in changes in the price.

But it looks like maybe McDonalds is ignoring normal supply and demand theory and maybe McDonalds, for the good of its customers, might not be increasing the prices of its french fries and just temporarily reducing its offerings of medium and large-sized fries.

The idea that McDonalds is not limiting its offering of hash browns might mean it wants customers in the morning to continue to buy the morning breakfast set of a egg/ham muffin, hash browns, and a hot coffee etc.

And then there is KFC. As buying boxes or buckets of KFC chicken has become a tradition in Japan on Christmas eve or Christmas day, it remains to be seen what KFC is going to do during the global logistics challenges that might have increased the price of chickens that it uses, if they are bought globally and not bought in Japan. 

What is KFC going to do now, the holiday season, and it the future related to prices in the wake of increasing supply prices, increasing logistics price, and increasing energy prices?

Demand of course is going to increase significantly so what is KFC going to do? For the good of its customers and customer good will they maintain prices as is, banking on the idea that an increase in demand will make up for or cover the increase in supply and energy costs during the holiday period.

And or will they then after the New Year period raise prices, like many companies are going to do, in 2022?

And then there are all the shops and stores they sell a lot of holiday and New Year's cakes. What exactly are they going to do. Have they already increased their prices because of supply and energy costs increasing or are they going to wait until after the New Year period to increase their prices too, if they haven't already increased their prices, which some articles have already suggested.

Most likely because many of these items might be considered important for the holiday period, consumers are just going to ignore the increase in prices, at least for the holiday period and buy what they want and need and then when the holiday period, including the New Year week holiday period ends, begin to think twice about buying something if the price has risen too high and or find substitutes with the quality or value.

Have a nice day and be safe!