Summary of Key Points
Recently, chain food and beverage brands such as KFC, McDonald's, and Wei Jia Liang Pi have all increased their prices. However, they haven't done so in a straightforward manner; instead, they've employed various “subtle tactics” (such as raising prices for takeout but not for dine-in services, increasing the price per serving while increasing the portion size, or implementing different pricing strategies in different areas). The underlying reason is the continuous rise in costs of ingredients, labor, and rent. Many brands have net profit margins so low that they only make a small profit (for example, 1.5% on every 100 yuan earned), forcing them to raise prices to survive. This price increase has led to a divergence within the industry: established brands with a loyal customer base can withstand the change, while smaller businesses are reluctant to raise prices and end up suffering losses; consumers, on the other hand, are becoming more selective—they're not opposed to price increases per se, but they want to see if the increase comes with corresponding value (such as improved quality of ingredients).
Detailed Analysis
1. The “Creative Ways” Food Brands Use to Raise Prices: Subtle Increases That Don’t Trigger Resistance
Chain brands are wary of direct price hikes that might provoke backlash, so they've come up with five “respectable” methods:
- Secretly raising prices for takeout: The price of dine-in meals remains the same, but takeout becomes a few yuan more expensive. For instance, Lao Xiang Ji’s takeout prices have increased by 1–3 yuan, and KFC’s delivery fees are 0.8–4 yuan higher than dine-in prices; you only realize you're paying more when you place an order.
- Different prices in different locations: Prices in core business districts of first-tier cities are higher than those in third-tier cities. For example, at Xijia De in Beijing, 12 dumplings cost 29 yuan, while in some other cities, the same amount would buy you 15 dumplings, representing a 20% difference in unit price.
- Increasing prices by “upgrading” the product: Instead of simply saying prices are going up, they claim the ingredients have improved. Wei Jia Liang Pi replaced the regular hamburger with one that includes bacon, raising the price from 15 yuan to 18 yuan, and staff explain that more expensive leg meat is used, making customers feel the extra cost is justified.
- High prices for new products, gradual increases for old ones: New products are priced higher (e.g., A Mo’s handmade lychee and bamboo salad at 48 yuan), while older items see only small price increases (e.g., some McDonald’s dishes by 0.5–1 yuan) to avoid offending regular customers.
- No change in listed prices, but fewer discounts: The menu prices remain the same, but discounts for bulk purchases are removed, and additional fees are charged for extra ingredients. For example, Mi Cun Ban Shan rice bowls no longer offer significant group purchase discounts, and adding a milk foam to drinks now incurs an extra fee, resulting in a higher total bill at checkout.
2. A Net Profit Margin of 1.5%: “Affordable” Food Brands Can’t Survive
The net profit margin of Wei Jia Liang Pi’s Hangzhou store is only 1.5%, meaning that for every 10 million yuan in sales, the company earns a mere 150,000 yuan—less than one-third of the industry average (5–8%). Why such low margins? The reasons are:
- Ingredient costs: Import tariffs on beef have increased by 55%, tomato prices in Shenzhen have risen from just over 1 yuan to 7–10 yuan, and coffee bean prices (Arabica) have increased by 118% in 2025, causing Manner Coffee to raise its prices by 5 yuan per cup.
- Labor costs: Chef salaries have increased by 6.1% (currently averaging 6,777 yuan per month), and waiter salaries have also gone up by 1.6%. Additionally, it’s becoming difficult to find enough staff, so companies have no choice but to raise wages to retain them.
- Rent costs: Rent in popular areas continues to rise, and the food industry is no longer expanding as much (entering a period of competition among existing businesses). Relying on opening more stores to spread costs is no longer effective.
Therefore, price increases are a “passive choice”—they have to raise prices to stay in business.
3. A Chasm Between Established and Small Businesses During the Price Hike Trend
This price increase mainly affects established chain brands, which have loyal customer bases and can still attract customers even with small price hikes (for example, when Wei Jia Liang Pi raises its hamburger price by 1 yuan, there’s still a long queue of customers). Smaller businesses, however, are in a tough position:
- They lack brand influence, so customers are highly sensitive to price changes and tend to leave when prices rise.
- If they don’t raise prices, they either have to cut their profits (already low) or lower the quality of ingredients (using cheaper alternatives), or even close down altogether.
As a result, the industry is becoming increasingly polarized: established brands will survive, while smaller businesses will either be eliminated or forced to transform.
4. Price Increases Are Not About “Exploiting Customers”: Consumers Care About Whether the Value Justifies the Cost
Consumers are not against price increases in general; they’re opposed to those that don’t come with any improvements. For example, when Wei Jia Liang Pi raises the price of its hamburger but adds bacon and pickled cucumbers, customers are more likely to accept it. However, some brands engage in “false upgrades” where prices increase without any real improvement in quality or service, leading to a decline in customer traffic and eventually forcing them to lower prices again.
The key for brands is to show that the extra cost is worth it by using higher-quality ingredients, improving services, and enhancing the overall experience. For consumers, this also serves as an opportunity to make more informed choices—no longer blindly buying low-priced products or paying for superficial marketing efforts.
In Conclusion
The price increases by chain food brands are not accidental but a result of rising costs. The real question is whether these price hikes provide genuine value to customers. For food brands, this marks the beginning of a “value war”; for consumers, it’s time to use their wallets to support those brands that raise prices reasonably.