The era of cheap and convenient American fast food is long gone. With prices soaring, nearly 80% of Americans now consider eating fast food as a “luxury”.
According to Fox Business News, the April inflation report showed that the cost of dining out has risen by nearly 22% since January 2021. Fast food has been hit particularly hard, as prices at some chain restaurants have increased significantly even before the COVID-19 pandemic.
For example, in 2019, McDonald’s Big Mac burger was priced at $3.99. According to data from the online tracking website “Fast Food Menu Prices”, the current price has more than doubled to $8.29.
Subway’s $5 Footlong sandwich, a classic offering, has also disappeared. This iconic Subway sandwich used to offer a meat and vegetable-filled foot-long sandwich for $5.
In 2019, a Subway Footlong sandwich was priced at $5.50, but by 2024, the price has risen to $8.49. Prices may vary by location.
Additionally, Chipotle’s beloved chicken burrito, which was priced at $6.50 in 2019, now sells for $10.70.
Fast food chains attribute the price hikes to increased wages and rising costs of ingredients.
Data from the Federal Reserve Bank of St. Louis shows that the rise in fast food prices has outpaced the average hourly income of most fast food workers. The increase in fast food prices has also exceeded the inflation rate, with current prices up 41% since 2017, compared to a 35.9% cumulative increase in the Consumer Price Index during the same period.
Consumers are feeling the pressure. A recent survey by LendingTree found that 78% of consumers now consider eating fast food a “luxury”.
Half of the respondents indicated feeling financially strained. Among Americans earning less than $30,000 a year, 71% reported feeling economic pressure. Similarly, 58% of parents raising children and 58% of Generation Z respondents shared similar sentiments.
Survey results show that three-quarters of Americans typically eat fast food once a week, but now 62% of respondents say they are reducing their fast food consumption due to cost reasons.
As a response, some fast food restaurants are preparing to introduce promotions in June to attract customers.
McDonald’s will be adding a $5 value menu in June, while Wendy’s is introducing a $3 breakfast deal, both of which are limited-time offers.
McDonald’s CEO Chris Kempczinski said in an April earnings call, “Nearly all major markets, guest counts are down.”
Therefore, many fast food chains are offering exclusive deals through mobile apps and loyalty programs, as well as free menu items as rewards for frequent customers.