Inflation bites McDonald's India as it plans price revision again

McDonald's, India's largest fast food chain operator and mostly preferred for its burgers, is raising prices again, said media reports, adding that the rise could be in range of 5-6 per cent.

Reports said that the decision has come on the backdrop of rising inflation in the country, especially food inflation, which has been denting margins of the company.

The move follows a 5 per cent hike after the government increased the service tax rate in February.

"There is pressure and it's a tough environment, no doubt. But inflation is at 8-10% so we have to hike our prices," said Amit Jatia, vice-chairman of Hardcastle Restaurants which owns franchisee for west and south India.

Consumer spending in India took a hit as inflation rose in double-digits, while income level hardly improved amid global economic uncertainties. McDonald's said same-store sales remained under pressure and although they would grow, the increase would not be at the 22 per cent achieved in the fiscal year ended March 2012.