Has fast food become for the wealthy? Once hailed as the less-healthy-but-cheaper alternative to filling one’s stomach, more and more restaurant chains are raising the prices of their menus, pushing much of the lower-middle class to eat at home.
At some McDonald’s restaurants, for instance, a combo including a BigMac, a serving of fries and a Coke can cost up to $18.
The fast food chain’s CEO, Chris Kempczinski, said on a Monday earnings conference with Wall Street investors that low-income consumers who make less than $45,000 annually had mainly ceased placing orders.
“Eating at home has become more affordable,” Kempczinski explained. “The battleground is certainly with that low-income consumer.” “I think what you’re going to see as you head into 2024 is probably more attention to what I would describe as affordability,” he added.
McDonald’s said this week that its current quarter’s global same-store sales increased by just 3.4%, missing Wall Street’s projected rise of 4.7% and mostly due to menu pricing hikes.
A Connecticut McDonald’s location received criticism last week for its “outrageous pricing” after a customer discovered that an Egg McMuffin cost $7.29 and a side order of hash browns cost $5.69. Last summer, a franchisee in Darien, Connecticut, also came under fire for charging $17.59 for a Big Mac combination meal.
Fast-food companies have all cited increased commodity costs, despite the fact that prices for eggs, dairy, vegetables, and grains have been down since August, according to Technomic. It is more likely that the current trend of food and restaurant prices rising precipitously is due to the raising of the minimum wage in many states, which plays a role in every step along the way from production to point of sale, and that this is the trickling down effect to the consumer.
Furthermore, experts caution that when minimum wage increases spread across the nation, fast food costs will rise even more. In anticipation of California’s April implementation of a $20 per hour minimum wage for fast food employees, for instance, Chipotle and McDonald’s stated that they would be raising the pricing of their menu items at its Golden State locations.
