According to a report by Restaurant Business, menu prices at fast food restaurants have increased by 3.9% year-over-year in January. This was the same rate in December of 2020. This is the highest rate for menu price inflation since the Great Recession in 2008.
These abnormal spikes in menu prices all seem to point in the direction of restaurants that have limited to no wait staff.
Federal data reports that limited-service restaurant’s prices increased by 6.2%, and full-service establishments raised by 2.9%.
This divide became very prevalent in March when the lockdowns began.
Restaurant Business attributes this to wages and demand.
‘In the post-pandemic era, demand at limited-service restaurants has far exceeded demand at full-service restaurants. While the supply of full-service restaurants is constrained because of limitations on seating and the closures of a number of locations, what’s left of that business hasn’t necessarily been all that eager to take pricing dramatically higher, lest they lose customers.’
Since fast food restaurants are so easily accessible, and with take-out services already an established part of the business, there were no worries on seating arrangements to accommodate for the social distancing mandates.
Chick-Fil-a, for example, already had some long lines. Those lines got much larger as they snaked around corners across America.
Because of such higher demand, franchisee managers continually nudged up the prices, and consumers allocated more money on purchasing fast food.
Another factor, the report notes, is the increase of employee wages. Restaurant Business says that of all the restaurants they speak with, they continually cite difficulties in getting more employees, which has forced them to increase wages to compete with other massive corporations and retailers such as Walmart or Target.
The higher the wages go, the higher prices will get. Full-service restaurants have less of that problem since many staff rely on tips.
The WinePress has noted, however, that TGI Friday’s CEO has warned that a $15 minimum wage hike would result in slashed hours and higher menu prices.
Restaurant Business notes that the rise of menu item prices may also be attributed to increased demand for delivery services that the restaurant has implemented or relies on third-party companies that must additionally be paid.
The bottom line is a fast food restaurant menu’s costs, according to the report, are roughly the same as lower full-service restaurants.
AUTHOR COMMENTARY
We have noted in previous reports that inflation is rising across the board on all sectors it seems, and will continue to do so as more money is printed out of thin air, and more companies are forced to give in to higher wages, and out sourcing some of their services to third party companies capitalizing on the major shift of convenience and delivery in society.
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It should also be noted that this is what the broad masses are spending their money on. Instead of spending their money on things to greatly improve their health and/or practical items that could be used to survive the long haul (while saving money), they’d much rather spend more and more money on toxic food.
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