Hey, it’s Steve from Feasible Creative — your weekly shortcut to smarter money moves.
BUDGETING
McPrice Gouging
Remember the dollar menu? How about the five dollar foot-long?
Fast food used to be your cheapest option, but not anymore.
Here’s what’s happening, and why “cheap” fast food now costs more than cooking at home.
Need help building a personalized budget (for free)? I have a limited number of spots left:
Numbers Don’t Lie
It’s easy to just blame “inflation” for rising fast food prices.
However, according to FinanceBuzz, menu prices for most fast food restaurants have actually outpaced inflation rates since 2014:
When these value meals start costing more than a pound of ground meat and rice, something else has to be going on, right?
The Real Deal
Based on my research, there are three main drivers pumping up fast food prices:
Labor Costs: When minimum wage increases for employees, businesses tend to pass these higher costs onto consumers. Said another way, menu item prices rise to protect company margins.
Ingredient Costs: Supply chain challenges during the pandemic pushed commodity prices up for items like chicken, beef, potatoes, and cooking oil. Years later, input costs have started to normalize, but prices still haven’t come down for consumers.
Price Gouging: Again to protect profits, many chains have kept prices high despite easing costs. A recent FTC report (although focused on groceries) found that large food companies have cited inflation as a cover to raise prices beyond cost increases. This is a pattern fast-food chains have mirrored.
The Bottom Line
At this point, fast food isn’t cheap anymore due to higher labor and ingredient costs, along with companies working to protect margins. To combat this, I’m simply cooking more at home. It’s healthier, tastes better, and keeps my budget on track.
Need help building a budget that can work around rising food costs?
Talk Soon,
Steve
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