“Wait,” weary consumers ask, “shouldn’t fast food be cheaper?” (laughs) Fast food prices have been rising faster than inflation this year. A paper-wrapped burger, box of nuggets, or carton of fries will cost you 29% more in 2023 than it did in 2019.
Via Restaurant Business According to some unexpected statistics shared at the recent Restaurant Finance and Development Conference, 52% of fast food customers reported feeling “sticker shock” after their last visit. Fast food prices have increased 6.2% in the past year – nearly 200% faster than the rate of inflation and consistently outpacing prices at full-service restaurants (4.3%) and grocery stores (2.1%).
To show how steep the 29% increase is, the same combo meal that would have cost you $8 in October 2019 will now cost you $10.32 before tip. Not surprisingly, many consumers feel that hitting the fast food drive-thru line is no longer worth it, and volumes are falling. Customer traffic slowed 2.5% across the industry in October 2023, which comes on top of another traffic decline of 4.2% in September. For example, this may seem confusing considering that McDonald’s sales increased 8.1% last quarter. However, the positive revenue trend was largely a result of price increases. Actual fast food transactions are declining and show no signs of picking up in the near future. This trend is hitting low-income consumers particularly hard, as fast food was (perceived to be) a cheaper option that many families depended on for reasonably priced meals.
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dry food lover hungry for change
Fast food drive-thru sign – NeonJellyfish/Getty Images
Some brands are pushing pricey items like the return of the Dollarita at Applebee’s or Red Lobster, giving the Ultimate Endless Shrimp permanent promotion. Meanwhile, Texas Roadhouse and Chipotle have kept menu prices high and climbing. Frustrated consumers expressed their complaints in a disappointing (and concerning) Reddit thread. One user wrote, “Last month I learned my lesson, ordered a burger at Wendy’s, it ended up being over $8 with tax. I will never blindly order fast food again and I think they count on that.” are doing.” Notably, Wendy’s prices increased more than any other fast food chain in 2022.
These aggressive price increases appear to be a symptom of greater socio-economic unease. One Redditor wrote, “I honestly don’t know how to survive anymore. Everything is getting more and more expensive, yet no one is getting a raise. Something’s got to give.” Food prices rose 3.3% over the 12-month period including October. This applies to full-service restaurants and groceries.
Other pressures have a greater impact on the fast food industry in particular, such as the unprecedented $20 minimum wage approved by California Governor Gavin Newsom for all limited-service workers in the state. Some businesses have raised menu prices to compensate for higher labor costs and operating costs due to inflation.
Read the original article on Tasting Table.
Source: www.bing.com
