If you ask someone why they choose to eat at a fast food chain, one of the first answers you normally hear is because of how affordable it is—but it seems that the budget-friendly appeal of fast food is fading just as fast, according to new data presented by Bloomberg.
Sales gimmicks like Burger King's pile of 10 chicken nuggets for $1 may still be getting customers in the door, but the reality is that non-discount menu items have become increasingly expensive over the years. Hamburgers have seen price hikes of upwards of 55 percent over the last decade, to an average of $6.95, Bloomberg reports—and the costs of chicken sandwiches have seen a similar trend, with prices escalating by 27 percent since 2008. These cost increases exceed overall U.S. price inflation recorded during the same period.
Bloomberg notes that McDonald's, once infamous among consumers for their vast Dollar Menu, recently introduced $6 meals that include a small burger, fries, soda, and a fried pie—but if you choose regular menu entrées, like chicken tenders or a burger with bacon the total can end up being twice that, or more.
The price gap between value menu items and regular menu items (both often highly caloric and nutritionally poor) are becoming more and more noticeable at many chains—in Chicago, the metropolitan market where Bloomberg pulled its data from, Taco Bell's "Grilled Stuft Burrito" is $5 and change, whereas a cheese, bean and rice burrito is $1. Prices vary by market, but data shows this trend is well on its way to becoming a permanent change at all chains.
But the most poignant aspect of this trend is that average fast food prices are now closer to being on par with items available at fast-casual chains. In the case of Shake Shack, menus used to be nearly 30 percent pricier than those at Burger King or McDonald's. According to research from Datassential, a food industry marketing firm, the cost difference between a hamburger from Shake Shack and a traditional fast-food drive thru is now less than 8 percent.
Fast-casual restaurants and fast-food chains are very distinct; some, like Chipotle and Panera Bread, have proved that wholesome ingredients can be used in appealing meals at attractive prices, which are no longer far and away from those being charged at drive thru windows.
It's clear that menus at fast-casual restaurants aren't perfect by any means, but nutritionists have found redeeming, healthy options and orders at these restaurants. Cooking Light has published an in-depth guide to ordering the healthiest meals at national chain restaurants, and readers can easily discern the nutritional value between items at leading fast-food chains as well as the fast-casual restaurants on this list.
Since prices aren't noticeably cheaper at fast-food chains anymore, consumers could feasibly turn to fast-casual chains and their healthier on-the-go meals instead.
But there's also the fact that cooking at home is cheaper than dining out—and has been getting even less expensive.
“It’s expensive to eat out—period,” Bob Goldin, partner at food-service consultant Pentallect Inc., told Bloomberg. “Restaurant pricing is starting to be an inhibitor to the industry for growth.”
Many factors are contributing to price hikes, including increased wage levels as well as operational expenses, says Omair Sharif, an economist at Societe Generale, but these markups are getting harder and harder to ignore.
All food prices, including those at independent grocery stores and restaurants, have increased at similar rates over the years—up until 2009, when growth patterns largely diverged for fast food chains, according to data from the United States Department of Agriculture. Prices at all restaurants, including drive thrus and those at other chains, are influenced by labor rates and overhead costs like rent and facility upkeep. But lower farm and commodity food costs have helped keep prices lower at grocery stores, whereas restaurants don't feel as much of that benefit.
As it becomes clearer that eating fast food is not as cheap as it once was—especially compared to prices at other establishments—one of the last reasons why consumers head to the drive thru is convenience. Purchasing a ready-made meal in mere minutes could be a part of why so many Americans eat fast food on a regular basis: up to one-third of U.S. adults each day, apparently.
It's true that home cooks will never be able to turn raw ingredients into a full meal in the two minutes that it takes for someone to place an order at the drive thru—but many have discovered ways to turn total meal prep and cooking time into less than half an hour. In fact, Cooking Light has an entire section of recipes on our site dedicated to meals that can be made in 20 minutes flat.
And since time is of the essence to every home cook, we've launched a new section where we highlight the best ready-to-eat items available to shoppers in the market. Even just assembling meals at home could not only be healthier for you, but also save you money in the process.
In any case, it's clear that fast food chains are losing ground with customers who can't justify their habits anymore—visits to fast-food restaurants have been declining overall, according to Bloomberg. Deals like Wendy's "4 for $4" are a way for these restaurants get customers in the door, where they'll end up spending money elsewhere on other menu items.
And fast-food chains will continue to create and promote these value packages, too—but in an era where it costs just about the same to eat at any restaurant, chain or not, where's the value in visiting the drive thru any longer?