Key insights

• 💸 Fast food prices have risen, making it difficult to find items for just a dollar
• 🍔 Average prices for fries, Happy Meal, and burger combo have increased
• 📈 Consumer Price Index shows a 28% increase in limited service meals category from 2019 to 2023, exceeding full-service meals and overall inflation
• 👩‍🍳 Labor is the main culprit for high prices
• 🏪 Competition for employees is leading to higher wages for fast food workers
• 🍽️ Casual and fine dining are benefiting from the decreasing price gap with fast food
• 💳 Consumers with $50K and below income experiencing constraint in spending power
• 📱 Fast food chains are investing in apps and loyalty programs to combat the decrease in value

Q&A

• How are fast food chains combatting the decrease in value for consumers?

  Fast food chains are investing in apps and loyalty programs to combat the decrease in value and are aiming to target ads based on consumer preferences. The industry's ability to drive growth from a value perspective is pivotal for its future.

• What income segments are experiencing the impact of fast food price increases?

  Consumers with $50K and below income are facing a constraint in spending power, resulting in a pullback in spending at fast food chains. Inflation is driving prices up with little expectation of decrease.

• How are casual and fine dining restaurants adapting to the changing fast food prices?

  Casual and fine dining, as well as full-service restaurants, are taking advantage of the narrowing price difference with fast food chains. While fast food prices have increased, sales for major chains like McDonald's, Wendy's, and Yum Brands have surpassed pre-pandemic levels. Investors are now focusing on companies that can drive growth through volume rather than raising prices.

• How are labor costs impacting fast food prices?

  Fast food restaurants are facing increased costs due to the need for more labor, competition for employees, and minimum wage hikes in some states, which are leading to higher prices for consumers.

• What are the main factors contributing to the rise in fast food prices?

  The rising costs of food, beverage, packaging, and mainly labor are the main culprits for the increased prices. The labor market became increasingly competitive during the pandemic, with the number of employees in the limited service restaurant category still below 2019 levels and more job openings.

• Why have fast food prices increased?

  Fast food prices have risen due to the rising costs of food, beverage, packaging, and, mainly, labor. The labor market became competitive during the pandemic, leading to fewer employees and more job openings, resulting in increased prices for consumers.

• 00:00 Fast food prices have increased significantly in recent years, outpacing inflation and full-service meals. Consumers are nostalgic for the days of cheap fast food.
• 01:14 Fast food prices have increased due to rising costs of food, beverage, packaging, and mainly labor. The labor market became competitive during the pandemic, leading to fewer employees and more job openings.
• 02:35 Fast food restaurants are facing increased costs due to the need for more labor, competition for employees, and minimum wage hikes in some states, leading to higher prices for consumers.
• 03:50 Casual and fine dining, as well as full service restaurants, are benefiting from the decreasing price gap with fast food. Sales for fast food chains have remained strong despite increased prices, and investors are now looking at who can drive growth based on volume.
• 05:01 Several fast food chains, including McDonald's, are experiencing consumer pullback due to lower spending power especially among consumers with $50K and below income. Inflation is driving prices up, with little expectation of decrease.
• 06:22 Fast food chains are investing in apps and loyalty programs to combat the decrease in value and are aiming to target ads based on consumer preferences. The industry's ability to drive growth from a value perspective is pivotal for its future.