Is fast food becoming a luxury item?
A new survey on fast-food inflation finds that four-fifths of Americans say the same.
Fast food prices are up 4.8 percent since last year and 47 percent since 2014, according to the Bureau of Labor Statistics.
A new survey of more than 2,000 consumers from personal finance site LendingTree found that many diners frown upon their restaurant receipts.
◾ 78% of consumers said they consider fast food a luxury item due to its high cost.
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◾ 62% said they are eating less fast food because of rising prices.
◾ 65% said they were surprised at their fast food bill in the past six months.
◾ 75% said it is cheaper to eat at home.
The results of the LendingTree survey, conducted in April, were released on May 20th.
“For generations, American families have viewed fast food as a relatively inexpensive option to eat on nights when they don’t feel like cooking after work or when they’re getting the kids home from soccer practice,” said Matt Schultz, principal credit analyst at LendingTree.
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But as prices rise, opinions are changing: When consumers were asked in a LendingTree survey about their go-to choices for quick, cheap meals, 56% said they would “cook at home,” while only 28% chose fast food.
In light of the rising cost of fast food, USA Today recently analyzed the prices of combo meals at five major burger chains. The report found that in Seattle, a Big Mac combo now costs nearly $15. Prices are rising across the board, with Five Guys topping out at $20 for a meal.
Earlier this year, a Five Guys receipt showing a $24.10 meal went viral, sparking a heated debate about rising fast-food prices.
“This is disappointing because it goes against what we expect and what we love about fast food,” said Kimberly Palmer, a personal finance expert at NerdWallet. What people love about fast food is its affordability.
Adding to the price shock, rumors have circulated recently that Wendy’s and other chains are experimenting with “surge pricing,” a technique in which customers are charged extra during peak hours.
Wendy’s officials assured customers that they had no plans to spike prices, but a LendingTree survey found that 78% of Americans said they were concerned about price hikes.
“There’s a perception and a feeling that because of inflation, some companies are raising prices more than they need to,” Schultz said.
Fast food price shock: Customers may abandon drive-thrus
Diners may be retreating from drive-thru restaurants, according to industry data.
According to industry publication Restaurant Dive, several fast-food chains, including McDonald’s and Wendy’s, saw their performance decline last quarter “as lower-income customers cut back on spending.”
In response, “many operators are planning value-focused offerings this year to lure customers back,” the report said.
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Burger King announced a slew of perks and discounts for loyalty program members this week, one of several promotions loosely tied to National Hamburger Day on Tuesday. Wendy’s recently launched a one-cent cheeseburger, and McDonald’s is reportedly planning a series of $5 meal deals.
According to another industry publication, Restaurant Business, “McDonald’s, Wendy’s, Burger King and Jack in the Box are all preparing great meal deals this summer in an effort to bring back customers.”
Price tags aside, most Americans still eat at McDonald’s at least occasionally: A LendingTree survey found that three-quarters of consumers eat fast food at least once a week.
Daniel de Visse covers personal finance for USA Today.
