Fast Food Prices Rose 29% In 4 Years, And Customer Traffic Is Slowing Down
"Wait," weary consumers ask, "isn't fast food supposed to be cheap?" (Lol sike.) Fast food prices have been rising even quicker this year than inflation. That paper-wrapped burger, box of nuggets, or carton of fries costs you 29% more in 2023 than in 2019.
According to some unappetizing figures shared at the recent Restaurant Finance and Development Conference, 52% of fast food customers reported feeling "sticker shock" after their last visit, via Restaurant Business. Fast food prices have risen by 6.2% over the past year — nearly 200% quicker than the rate of inflation and consistently outpacing prices in full-service restaurants (4.3%) and grocery stores (2.1%).
To illustrate how intense a 29% increase is, the same combo meal that would have cost you $8 in October 2019 will now set you back $10.32, before tip. Unsurprisingly, many consumers feel that hitting the fast food drive-thru line isn't worth it anymore, and volume is dropping. Customer traffic slowed by 2.5% industry-wide in October 2023, which comes on top of another traffic dip of 4.2% in September. It might seem confusing considering McDonald's, for instance, enjoyed an 8.1% increase in sales last quarter. However, the positive revenue trends were largely the result of price hikes. Actual fast food transactions are dwindling and don't show signs of picking up any time soon. The trend is hitting lower-income consumers especially hard, as fast food was (supposed to be) a cheaper option on which many households relied for reasonably priced meals.
Drained foodies hungry for change
Some brands have been pushing value items like the return of the Dollarita at Applebee's or Red Lobster making Ultimate Endless Shrimp a permanent promotion. Meanwhile, Texas Roadhouse and Chipotle keep menu prices high and climbing. Exasperated consumers aired their grievances in a depressing (and relatable) Reddit thread. "Learned my lesson last month, ordered a burger at Wendy's, was over $8 with tax. Never again will I blindly order fast food, and I think that's what they're counting on," wrote one user. Notably, Wendy's prices became more inflated than at any other fast food chain in 2022.
These aggressive price increases seem symptomatic of greater socioeconomic unease. One Redditor wrote, "I honestly don't know how to survive anymore. Everything is getting increasingly expensive, yet no one is getting a raise. Something has to give." The price of food across the board rose by 3.3% over a 12-month span that includes October. That applies to full-service restaurants and groceries.
Other pressures weigh more specifically on the fast food industry, like the groundbreaking $20 minimum wage approved by California Governor Gavin Newsom for all limited-service employees in the state. Some businesses have raised menu prices to offset higher labor costs and operational costs due to inflation.