Why Fast Food Prices Increasing and how it’s Affecting Business

Along with higher menu prices, the amount of orders are also at an all-time high.

Business Insider

Along with higher menu prices, the amount of orders are also at an all-time high.

Imaan Moten, Photojournalist

lf you are an avid consumer of fast food, the stock market, or both, you may have noticed a significant change in companies such as McDonald’s and Chipotle. Since the beginning of the pandemic, everything has become more expensive – whether it’s food, gas, or even mundane things such as parking. The inflation has been getting out of hand with no reprieve. 

Extremely popular companies such as McDonald’s, which have a constant stream of people and customer reliability, have no problem raising prices whenever they want to because they know that it will have little to no effect on their business. While prices may fluctuate from franchise to franchise, it has been estimated that an average 3.6% increase in prices appears year after year (EatThis).   Along with these reasons, there has also been an increase in prices across the board because of more conditional reasons; problems with labor and supply chains have made businesses costs go up significantly. 

These higher prices, as well as increased orders, have also greatly affected the company’s value and stock. Recently the company announced their quarterly earnings, and it was discovered that they had made over 12.7% more sales now than they did during this period last year and their total revenues jumped about 14% (CNN). To put this more into perspective, on November 4th, 2020, McDonald’s stock was at $214.87 and on November 3rd, 2021, it is now at $250.40. This is all attributed to higher menu prices, celebrity meals, and the newly popular chicken sandwich.  

Similarly, Chipotle prices have been raised 4% this year across the board and so far customers aren’t blinking (Business Insider). The company has said that these price increases are in response to higher employee wages, popular demand, and problems with supply chains. Another thing that factors into Chipotle’s reasoning for the price range is the significantly increased ingredient pricing. Chipotle, unlike other fast-food restaurants, uses a lot more fresh ingredients and higher-priced items such as avocados.

Much like McDonald’s, Chipotle’s stock prices have also seen a significant increase in the past year. On November 4th 202o, the stock price was at $1277.37, and now on November 3rd, 2021 their price is at $1801.19.

Yorba Linda High School student Adil Ismail (10) added that “I agree fast food prices have been increasing a lot and especially when using delivery apps like Postmates or Doordash you really see the effect.” 

In conclusion, fast food prices are rising significantly, but along with these raises are also coming things like higher employee wages that somewhat balances out the cost. Another thing to be noted is that while prices are increasing and stocks are going up, the market is at a high at the moment and a recession is expected in the near future.