Service at McDonald's Slows as Company Feels 'Pressure' on Operating Hours Amid Labor Shortages: CEO Kempczinski said the lack of skilled workers is impacting the food giant's speed of service and in turn putting "pressure" on its operating hours.

By The Epoch Times

This story originally appeared on The Epoch Times

Bradley Kanaris | Getty Images

Service at McDonald's is getting slower while the company is feeling the pressure on its operating hours as it struggles to fully staff its restaurants, CEO Chris Kempczinski said.

Speaking at the company's third-quarter 2021 investor call on Wednesday, Kempczinski noted that McDonald's is finding it "very challenging right now" to find skilled workers for jobs in its restaurants.

"Certainly, it's a very challenging staffing environment in the U.S., a little bit less so in Europe, but still challenging in Europe. In the U.S. for us, we are seeing … that there is wage inflation. Our franchisees are increasing wages there over 10 percent wage inflation year-to-date that we're seeing in our McOpCo (McDonald's Operated Company) restaurants were up over 15 percent on wages, and that is having some helpful benefits, certainly, the higher wages that you pay it allows you to stay competitive," Kempczinski said.

"But we're also seeing is that it's just, it's very challenging right now in the market to find the level of talent that you need," the CEO added.

Kempczinski said the lack of skilled workers is impacting the food giant's speed of service and in turn putting "pressure" on its operating hours.

"And so for us, it is putting some pressure on things like operating hours, where we might be dialing back late night for example from what we would ordinarily be doing. It's also putting some pressure around speed of service, where we are down a little bit on speed of service over the last, kind of, year-to-date and we did in the last quarter. That's also a function of not being able to have the restaurants fully staffed," Kempczinski said.

However, the CEO noted that the issue is "not unsolvable," pointing to McDonald's' operated companies, which he said place more focus on engaging with staff and providing them with training in an effort to keep them motivated.

"That can make a difference," the CEO said. "But certainly, I was hoping and expecting that we're going to see the situation improved, maybe a little bit more quickly than what's materialized. And I think it is going to continue to be a difficult environment for the next several quarters."

Multiple companies, particularly those in the dining and hospitality sector, as well as small-business owners, are increasing pay for employees in an effort to counteract shortages and attract workers amid nationwide labor shortages and hiring difficulties owing to the COVID-19 pandemic.

The McDonald's CEO also acknowledged supply chain issues currently playing out across the globe which has seen the price of goods soar along with consumer shortages.

Kempczinsk said commodity costs for McDonald's were up 2 percent or so for the first nine months of this year, but that he expected this to grow to between 3.5 percent and 4 percent for the full year, which will put a little bit of additional pressure on the fourth quarter.

To offset the wage increases, labor pressures, and soaring supply prices, the fast-food company has raised its prices, with Kempczinsk noting that those increases are set to reach around percent year-over-year by the end of 2021, Kempczinsk said.

"We haven't seen, I'll say any more resistance to our price increases than we've seen historically. So that 6 percent has been pretty well received by customers," he said.

President Joe Biden has attempted to alleviate supply shortages and disruptions before Christmas, and earlier this month said he had received confirmation from UPS, FedEx, Walmart, and other companies, as well as the Port of Los Angeles, to increase the number of shifts to deal with a backlog of container ships, labor shortages, and warehousing issues.

Despite the labor shortage, McDonald's' global comparable sales were up 12.7 percent in the third quarter and increased 10.2 percent on a two-year basis, according to its third-quarter earnings released on Wednesday. The company posted total revenues of $6.2 billion.

By Katabella Roberts

Katabella Roberts is a reporter currently based in Turkey. She covers news and business for The Epoch Times, focusing primarily on the United States.

Wavy Line

The Epoch Times, founded in 2000, is headquartered in Manhattan, New York, with a mission to provide independent and accurate information free of political bias or corporate influence. The organization was established in response to censorship within China and a lack of global awareness regarding the Chinese regime's repression of the spiritual practice Falun Gong.

The Epoch Times is a widely read newspaper that is distributed in 33 countries and is available in 21 languages. The publication has been critical in providing balanced and detailed reporting on major global events such as the 2003 SARS pandemic and the 2008 financial crisis. Notably, the organization has played a key role in exposing corruption inside China.

Aside from its human rights coverage, The Epoch Times has made significant contributions in a variety of fields. It has received praise for its in-depth analysis and expert perspectives on business, the economy and U.S. politics. The newspaper has also received praise for its broad coverage of these topics.

A series of editorials titled "Nine Commentaries on the Communist Party" appeared in The Epoch Times in 2004. It asserts that freedom and prosperity in China can only be achieved by eliminating the Communist Party, which violated China's cultural and spiritual values. In addition, the organization led the Tuidang movement, which resulted in over 400 million Chinese citizens quitting the Communist Party. In spite of this, 90% of websites referring to the "Nine Commentaries" were blocked by the Chinese regime.

The Epoch Times has been at the forefront of investigating high-level corruption cases within the Chinese regime, with its reporters taking significant risks to uncover these stories. The organization has received several awards for its investigative journalism.

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