Fast food restaurants were once considered a less expensive eating-out alternative for your family. That has completely changed. Are fast food restaurants justified in raising their menu prices so high? Some of the price increases are obviously justified due to inflation. However, 20% to 30% price increases can't be justified.
Consider this:
McDonald's menu prices are up about 10% this year. That's on top of a 10% increase last year. Also, say goodbye to the $1.00 value menu.
Chipotle has raised prices five times since June 2021. That is on top of what they did prior to 2021.
Labor Statistics report that fast food prices rose 6.2% over the past twelve months in October. Now, consider that inflation over the last 12 months has diminished greatly.
Pizza Hut Introduced a $7 deal lovers' menu. The value deal used to be $5.
To get Subway's $5 footlong deal, a consumer has to purchase two sandwiches, not just one.
Fast-food restaurants have obviously been taking advantage of the consumer, blaming inflation for their increases. Analysts say these restaurants will not lower prices, even though inflation is declining. Analysts also suggest that, historically, restaurants don't lower prices after raising them. Finally, with inflation slowing, it doesn't appear that fast-food restaurants are done. These restaurants will not lower prices, even though inflation is declining with their price hikes.
It has taken a while for the consumer to start noting this form of consumer abuse by the fast-food industry. Consumers are finally voicing their concerns regarding the fast-food prices and the arrogance of an industry that acts as if they can continue pricing gouging and get away with it.
Well, fast-food restaurants might start paying attention to their foot traffic. There comes a point where consumers won't be able to justify these higher prices. Further, if we go through a recession in 2024, these restaurants will likely see the error of their ways.
Remember, the consumer can still vote with their pocketbook and will likely do so. Until then, those annoying lines of cars wrapped around Chick-fil-A will continue. There is nothing like an overpriced chicken sandwich.
Source: Business Insider
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