The fast food industry has long depended on affordability as one of its key selling points, offering customers quick meals that are easy on their wallets. Those days might be in the past, however, as inflation and other factors have sent fast food prices soaring in recent years. According to Finance Buzz, average prices at the country’s most popular chains have increased by as much as 100 percent over the last decade. The 31 percent rise in inflation over the same period hasn’t helped either, leaving consumers to question whether fast food is worth the cost.

That’s what a recent study by LendingTree found, with 78 percent of respondents saying that they now consider fast food to be a luxury. A further 62 percent of Americans said that they were eating less fast food as a result. These negative views on the country’s drive-throughs are consistent with broader consumer discomfort about the economy as a whole. “Things are much more expensive than they used to be, and it is not just big things,” said Matt Schulz, chief credit analyst at LendingTree. “It is things we buy every day, like milk and gas and Happy Meals… and when the things we buy regularly are a lot more expensive than they used to be, no one should be surprised that people’s view of the economy is not great.”

These changes are especially jarring for consumers who have always relied on fast food as a low-cost option. “For generations, fast food has been a quick, relatively inexpensive way for busy families to have a quick meal . . . and a lot of people are finding that that is changing,” said Schulz. Along with eating at home more, some consumers are responding to rising fast food prices by going to chain restaurants that are now priced similarly to their drive-through rivals. For example, Chili’s 3 For Me promotion starts at $10.99 while a Big Mac Meal costs $13.89 in some east coast markets. “If [customers] perceive that they can go to a sit-down restaurant and have somebody serve them for the same price, instead of going through the drive through . . . a lot of people are certainly going to opt for that sit-down choice,” said Schulz.

Questions:

1. Do you think the fast food industry’s rising prices clash with its marketing image as a quick, affordable option?
2. How are chain restaurants like Chili’s using promotions to lure consumers away from fast food companies?

Source: Ellie Stevens, “Fast Food is a ‘Luxury’ Now, but McDonald’s, Wendy’s, and Burger King Are Offering Ultra-cheap Deals to Win You Back,” Fast Company, May 29, 2024.