Why has fast food become so expensive?
There was a time when you could get a hamburger at a fast food chain for under 100 yen, but these days the price has risen to around 200 yen at the cheapest.
Why Fast Food Has Gotten So Expensive - YouTube
In the US, McDonald's fries cost $3.38, a Happy Meal costs $4.89, and Burger King's burger combo costs $8.74.
However, these are just standard prices. In reality, prices vary depending on the location of the store, and in Midtown Manhattan, where CNBC is located, fries cost $4.49, a Happy Meal costs $5.99, and a burger combo costs $11.99.
Looking at the changes in the Consumer Price Index from 2019 to 2023, we found that fast food prices rose by 27.76%. In addition, prices for restaurants and other food services rose by 23.78%, both of which exceeded the increase in the overall index (19.18%).
The price increase is due to rising prices across the board. In the case of McDonald's, the cost of food, beverages and packaging will increase by 11% between 2022 and 2023. In addition, rising wages are also contributing to the price increase.
Comparing the number of employees in the fast food industry in 2019 and 2022, including the pandemic, there was a slight decrease from 4.489 million to 4.464 million.
On the other hand, the number of stores has increased from 247,000 to approximately 258,000. Because there is a shortage of workers, wages are rising.
Below is a graph showing the percentage of labor costs in sales at each chain store. In all cases, the number of customers decreased due to the pandemic in 2020, and the percentage of labor costs increased relatively. Full-service restaurants (yellow, light blue) have decreased, but fast food restaurants (red, green) have remained high.
Fast food restaurants passed on labor costs to customers and raised prices. The average amount paid at fast food restaurants from December 2023 to February 2024 was $18.03 (about 2,850 yen), up 4.5% from the previous year.
The only bit of good news is that prices are reported to be increasing at a slower pace.
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