Fast food prices are climbing, forcing Americans to think twice about hitting the drive-thru. High prices are getting some fast food fans to replace their treats with 'fakeout' instead of takeout, cooking cheaper versions of their favorites.
"It's insane. I get the frozen Asian foods from Trader Joe's; we're big on pot stickers, gyoza and bulgogi fried rice. And have 'takeout fakeout' nights," wrote Reddit user The_AmyrlinSeat in a thread about fast food price hikes.
The quality for the price leaves something to be desired for some fans.
"We stopped going to Wendy's for anything not breakfast now that it is some precooked chicken," wrote greenmky. "I can get that grade of preassembled salad at the grocery store."
And others looked at the health benefits.
"The bright side for us is that it has caused us to eat healthier at home," Reddit user Neon-Predator wrote.
A report from the National Restaurant Association shows that menu prices in September rose by 6 percent over the same period in 2022.
Compounding inflationary pressure on fast food prices are wage hikes, including the $20 per hour fast food minimum wage California approved. Major fast food companies Chipotle and McDonald's announced another round of price hikes in the Golden State to offset these costs.
Not so fast
As fast food prices have gone up, customers have stopped coming in.
Traffic across the entire industry expanded to a 4.2 percent plunge in September compared with 0.8 percent in July, according to data posted by analytics firm Placer.ai, as cited by Reuters.
Namely, McDonald's, KFC and Taco Bell finished with 3.7 percent, 2.1 percent and 1.2 percent declines respectively.
That comes as a result of consumers looking for cheaper alternatives to save money.
While prices can vary by the particular fast food restaurant and location, some customers shared depressing stories on how much they are paying now.
"I was in the drive thru at Wendy's and spent over $30. All I did was get 2 combo meals," Reddit user Temporary-Beyond-683 said.
And dixhuit_tacos said: "The salads at Wendy's used to $7-8, now they're $13!! For a bowl of lettuce with a little chicken and cheese on top!"
In September, grocery sales were up 1.6 percent year-over-year, according to the Census Bureau.
Who is hurt the most?
But not all consumers may be affected equally here.
Lower-income Americans are hit hardest by the price hikes. McDonald's executives said it has seen fewer visits from customers that make $45,000 or less per year during the company's third quarter conference call.
"It's clear that our customers continue to seek reasonably priced meals as rising costs persist and our markets around the world continue to respond," chief financial officer Ian Borden said.
R.J. Hottovy, head of analytical research at Placer.ai told Newsweek that grocery stores including Aldi have done a good job of bringing value to lower-income customers— something quick-service restaurants will need to do to lure customers back in.
"To bring customers back, quick-service restaurants need to increase the level of innovation for its lower priced products," he said. "Aldi's lower prices have certainly played a part in their increased visitation trends, but they've also done a good job introducing new low-priced products or different flavors of existing low-priced products."
Hottovy added that McDonald's Famous Order, inspired by celebrities, is one way fast food companies can lure consumers back in.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Anthony Russo is a Newsweek reporter based in New York City. His focus is reporting on consumer and retail news. ... Read more
To read how Newsweek uses AI as a newsroom tool, Click here.
