Fast food is beloved in America because it is cheap and convenient.
At least it used to be.
The recent inflation report for April showed that since President Biden took office, the cost of eating out at restaurants is up nearly 22%. However, fast food has been hit particularly hard, with prices dramatically rising at the most popular restaurant chains beginning even before the COVID-19 pandemic.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| MCD | MCDONALD’S CORP. | 256.21 | -4.51 | -1.73% |
| CMG | CHIPOTLE MEXICAN GRILL INC. | 3,166.02 | -44.08 | -1.37% |
| QSR | RESTAURANT BRANDS INTERNATIONAL INC. | 68.76 | -2.30 | -3.24% |
| YUM | YUM! BRANDS INC. | 139.97 | -0.86 | -0.61% |
A Big Mac sandwich at McDonald’s, for example, cost $3.99 in 2019. Now, that price has more than doubled to $8.29, according to Fast Food Menu Prices, an online tracker.
NEARLY 80% OF AMERICANS NOW CONSIDER FAST FOOD A ‘LUXURY’ DUE TO HIGH PRICES
Gone, too, are the days of the $5 Footlong at Subway. A BLT Footlong that cost $5.50 in 2019 now costs customers $8.49 in 2024, though prices can vary by location. Additionally, Chipotle’s beloved chicken burrito that cost $6.50 in 2019 now runs customers $10.70.
Fast-food executives have pointed to rising wages and increased costs for ingredients as factors driving up the prices on their menus.
Data from the Federal Reserve Bank of St. Louis shows that fast-food prices have actually increased faster than the average hourly earnings of most employees at fast-food restaurants. Fast-food prices have also outpaced inflation, rising 41% from 2017, while the consumer price index has increased by 35.9%.
Customers are feeling squeezed. A recent survey conducted by LendingTree found 78% of consumers now consider fast food to be a “luxury” purchase due to how expensive the meals have become.
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Half of those polled said they view fast food as a luxury because they are struggling financially. This is especially true among Americans who make less than $30,000 a year (71%), parents with young children (58%) and Gen Zers (58%).
The financial strain means fewer people are visiting the drive-thru. The findings show three out of four Americans typically eat fast-food once a week, but 62% of respondents said they are eating it less frequently due to the cost.
Some franchises are responding with temporary bargains. McDonald’s will add a $5 value menu in June, and Wendy’s has introduced a $3 breakfast deal, both for a limited time.
“Across almost all major markets, industry traffic is slowing,” McDonald’s CEO Chris Kempczinski told analysts in April. “We know our customers are looking for reliable everyday value now more than ever.”
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Many fast-food joints have also provided customers with exclusive deals available on their mobile apps and points programs that reward loyal customers with free menu items.
However, the fact remains that Americans remember when menu prices were lower, and higher costs for food and gas are souring their view of the economy. That is why Biden continues to tell voters he is fighting for lower prices.
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“I know many families are struggling, and that even though we’ve made progress we have a lot more to do. Inflation has fallen more than 60% from its peak, and core inflation fell to its lowest level in three years,” President Biden said after the April consumer price index report showed a 0.3% increase, slightly lower than what economists expected.
“Prices are still too high — so my agenda will give families breathing room by building two million new homes to lower housing costs, taking on Big Pharma to lower prescription drug prices, and calling on grocery chains making record profits to lower grocery prices for consumers.”
FOX Business’ Breck Dumas contributed to this report.
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