Talk about super-sized prices!
Americans heading for a quick bite, or a guilty pleasure, are seeing sticker shock when they visit their favorite fast-food joint thanks to inflation. Many restaurants, such as McDonalds, Chipotle and others, have raised prices in recent years because of rising costs. Overall, the cost of eating out is up about 22 per cent in the last year, according to federal data, and fast food has not been immune.
Fast-food prices also outpaced inflation, rising 41 per cent since 2017. The consumer price index has risen by 35.9 per cent during the same period.
“It’s so upsetting because it goes against what we are expecting and what we have grown to love about fast food,” Kimberly Palmer, a personal finance expert at Nerd Wallet, told USA Today.
Recently, the president of McDonald’s USA Joe Erlinger told customers that the average menu price at its franchises is up 40 per cent since 2019, not the 100 per cent jump some have claimed to see.
“Americans across the country are making tough calls about where to spend their hard-earned money,” Erlinger said. “And while we’ve been working hard to make sure our fans have great reasons to visit us, it’s clear that we — together with our franchisees — must remain laser-focused on value and affordability.”
Chiplote officials this year said customers haven’t been scared by its 7 per cent rise in prices, as sales have increased by the same amount, according to Quartz.
Here is a look at how much some fast-food menus have increased their prices in recent years:
McDonald’s
In 2019, a Big Mac at McDonald’s cost $3.99. According to McDonald’s, the average price of a Big Mac now is $5.29, though franchise owners have the autonomy to set prices based on their location, which resulted in one store offering an $18 Big Mac.
To help combat rising prices at McDonald’s the chain announced plans to offer a $5 value meal to help consumers.
“In our view, this new deal is more about value perception, seeking to change the media narrative around McDonald’s recent price hikes to refocus around a deep(er) value offering. We believe the new one-month meal deal could actually hurt sales (check decline) and margins, but help reinstate McDonald’s as a value leader in the industry,” Analysts at BTIG said in an investor note and reported by CNBC.
Chipotle
The beloved burrito chain isn't immune to price increases either. A chicken burrito cost $6.50 in 2019 and now costs $10.70.
After California passed a $20 minimum wage law earlier this year, Chipotle raised prices in the state by another 6 to 7 per cent.
“We did take a modest price increase of 6 per cent to 7 per cent. We’ve been watching the traffic since we took the price increase. We’re not seeing anything yet, we’re not seeing any change in behavior yet,” Chipotle CFO Jack Hartung told Fox Business’s The Big Money Show. “It’s very early, so we’ll keep a close eye on it.”
Taco Bell
In 2019, buying a Crunchwrap Supreme in the New York City metropolitan area would have cost $3.49. Now, it costs $5.29, representing a 51.6 per cent increase. Talk about a spicy cost!
In response to the rising cost of menu items, Taco Bell debuted a limited-time “Discovery Box” that costs $5. The box — which contains three different types of tacos and a fountain drink — will only be around until June 4.
Chick-fil-A
The chain’s popular nugget boxes are not immune to inflation; in 2019, an 8-count nugget box in the New York City metropolitan area cost $3.05. Today, it costs $5.99, representing a nearly 100 per cent increase.
A deluxe chicken sandwich bought in the NYC metro area cost $3.69 in 2019, and now costs $6.55, a 79.5 percent jump.
The company has been quiet about its price increases.
Burger King
The Whopper, Burger King’s marquee sandwich, could be bought for $4.19 in the NYC metro area in 2019. Now, it costs $7.79, an 85.9 per cent increase.
Restaurant Brands International executive chairman Patrick Doyle told CNBC’s Jim Kramer that while things are a “little tougher” for American consumers right now, he still believes Burger King — which is owned by RBI — offers affordable menu options.
“We think we’ve got a great menu offering now that has higher-end items and kind of entry-level items,” Mr Doyle said. “So, wherever the customer wants to come in and do business with us, we’ve got a great offering for them.”
Subway
The chain that became known for its ‘$5 footlong’ is hardly that anymore. Thanks to rising prices, that idea is gone. Now, a Subway BLT footlong costs $8.49 whereas in 2019 it cost $5.50.
Subway is aware of its old marketing campaign and answered a social media request to bring back a $5 sandwich for a limited time in 2020.
“We’re excited to bring back the greatest deal of all time featuring your favorite sandwich – Subway Footlongs made with quality ingredients, fresh baked bread and tons of veggies,” the company said at the time.
