For McDonald's, it's the summer of "value." The fast food chain is extending their new value meal deal into August, and other chains are adding their own to win back cost-conscious consumers. Let's do the numbers. 100%
When FinanceBuzz reviewed 10 popular items at McDonald's, it found average prices doubled over the last decade. In that same period, overall inflation, as measured by the consumer price index, was 31%. (Prices at McDonald's vary greatly depending on location,
a limitation FinanceBuzz disclosed in its methodology.)$5
The $5 value meal offer was only supposed to last until the end of July, but most McDonald's in the U.S. will keep offering it for the rest of summer. Business Insider estimated that ordering all the items included in the meal on their own would cost $10.26 before tax. -2.2%
Offering value doesn't always lead to growth. When McDonald's launched its $1, $2, $3 Dollar Menu in 2018, U.S. traffic still declined 2.2% that year. Fast food restaurants face stiffer competition these days from fast casual restaurants like Chipotle and Sweetgreen. 80%Fast food also has a perception problem, as 80% of people now consider it
a luxury. $20
The cost of fast food has outpaced inflation, but so have wages. California raised the minimum wage for fast food chain employees from $16 per hour to $20 per hour in April. California Gov. Gavin Newsom said the move hasn't reduced the number of jobs available, but some franchise owners told the Associated Press they've cut hours to control costs. |