Fast Food Prices Rise

Value menus continued to prosper at QSRs, but other menu items have become more expensive.
December 05, 2018

CHICAGO – Customers enjoy the bargains of dollar burgers and $5 pizzas at fast-food restaurants, but they are paying more when ordering off the value menu, Bloomberg reports.

The median coast of QSR hamburgers soared 54% over the last decade to reach $6.95, according to Datassential. Chicken sandwiches jumped 27% during that same time. Both increases were more than overall U.S. price inflation those same years.

“It’s expensive to eat out, period,” said Bob Goldin, partner at foodservice consultant Pentallect Inc. “Restaurant pricing is starting to be an inhibitor to the industry for growth.”

Fast-food menus are gravitating toward high- and low-priced items, leaving fewer middle ground items. For example, a Chicago Taco Bell has a $1 cheesy rice and bean burrito alongside a Grilled Stuft Burrito for more than $5. McDonald’s has a $6 meal deal with fries, burger, drink and a pie, but also has a new Bacon Smokehouse Quarter Pounder that costs close to $9 at a Chicago store.

“It’s a market-share fight,” Steve Easterbrook, McDonald’s CEO, told the news source. “I don’t see many people, many out there in our sector, who are actually growing traffic at all.”

QSRs now tout menu items that cost similar to farm-to-table and fast-causal chains, like Shake Shack and Habit Burger, which used to have menu prices close to 30% more than fast food. But now, that spread has shrunk to less than 8% because QSR prices have risen faster. “There’s more price competition at the fast-food chains versus what you’d expect to see at a full-service restaurant,” said Omair Sharif, senior U.S. economist at Societe Generale.