Inflation is coming for the fast food prices and, more importantly, food that has always been the cheapest option.
McDonald's (MCD) recently attributed raising prices by approximately 6% to the rising costs of both food, labor and the supplies needed to make its burgers.
Meanwhile, analysts at at KeyBanc estimated that Chipotle (CMG) raised the price of its steak and barbacoa entree by 6.2% at many locations.
The reason often comes down to the rising cost of ingredients — in the United States, grocery prices in general rose by nearly 10% between 2021 and 2022.
Eggs are now 22% more expensive while a pound of bacon commands 17.7% more than it did last year.
The cost of meats like beef and chicken are also rising fast — in April, pasta chain Noodles & Co. NDLS said that it would temporarily add a $1 surcharge to all chicken dishes to offset the rising costs of poultry.
What Do I Have To Pay More For This Time?
The next big chain to feel the heat of inflation is Restaurant Brands International (QSR)'s Burger King.
Less than six months after it introduced the 2 For $5 Mix-'N-Match offer, Burger King had second thoughts and decided to tack an extra dollar onto the offer.
It was already the 2 For $6 deal in 2021 before the chain slashed the price in what was likely an attempt to advertise it as a great deal.
Now once again the 2 For $6 Mix-'N-Match deal, the offer lets customers choose from a number of sandwiches for the set price. These include the Impossible King, the Big King, the Big Fish, the Single Quarter Pound King and the Original Chicken Sandwich.
While the deal now includes more sandwiches choice than in February, Burger King did pull out the Chicken Fries that it had previously advertised as part of the offer.
The Impossible King that is part of the sandwiches choices was introduced just a few days ago as part of the chain's efforts to expand its veggie offering — it is a standard pickle-cheese-and-tomatoes burger but with a plant-based Impossible meat patty.
The new deal comes into effect on June 27.
Burger King Wants More of Your Money
While the flip-flopping between $5 and $6 has some comedic effect, the rising cost of both groceries and fast food is no joke to those who already earn below the average income.
Fast food, and meal bundles in particular, have long been a way for low-income families to get inexpensive but filling meals.
When prices go up, those who already had less to spend on food are left with even fewer options. That's why fast food chains generally do not see a drop in sales even after raising prices; if anything, the "cheapest option" may attract customers who would have previously gone to more expensive establishments.
According to recent numbers from a study by insurance company Breeze, 73% of US households have recently cut back on restaurants and takeout while 57% spent less on grocery as a way to combat inflation.
"In recent years, most fast-food restaurants had, maybe, raised prices in the low single digits each year," industry analyst Matthew Goodman told The New York Times. "What we've seen over the last six-plus months are restaurants being aggressive in pushing through prices."
