Skyrocketing Prices Mean Fast Food Has Become A Luxury In California

Fast food prices have gone up considerably In California, making some customers feel like fast food meals are more of a luxury than a way to save money. A local franchisee mentioned, “Some diners now think fast food is a ‘luxury’ as prices creep up.” This shift has something to do with wage increases as well as other economic factors that are affecting the fast food industry.

Widespread Impact Of Wage Increases

To mitigate California’s new $20 minimum wage for fast food workers, restaurants all over the state are increasing their menu prices.

The increase in wages isn’t solely to blame, there is a bigger trend of labor and wage inflation that is pushing costs higher, redefining how restaurants operate financially both during and after the pandemic.

Feeling The Pinch

Owner of two Vitality Bowls that are located in San Jose, Brian Hom, hears it straight from the source.

He said that his customers are feeling the squeeze: “I’ve had some customers say: ‘the cost of going out is so high now, I’m looking to buy my own ingredients and make my own food at home because going out to fast food has become a luxury.'”

Balancing The New Budget

As fast food prices continue to rise, fast food enthusiasts are needing to reevaluate their dining habits.

Hom said, “They have to think twice: ‘Am I going to be able to afford it or not?'” This financial strain is redefining how customers decide when and if they are going to eat out.

Nationwide

California’s price increase isn’t unique to them.

Fast food costs are climbing because of wage increases all over the United States, breaking customers’ banks more than it ever has before.

Loyalty Of The Customer

Scott Rodrick, who runs 18 McDonald’s franchises in Northern California, underscores a significant concern, saying “The appetite that my customers have for price increases is not unlimited.”

Franchisees like Rodrick are hesitant about pushing their customers too much because of high prices.

Price Tags

According to Hom, his stores have made adjustments to their pricing not just once, but twice tis year to help deal with the increase in wages.

He explained, “My two stores had already changed their prices twice this year.”

A Quick Meal

As fast food costs get closer and closer to those of a casual dining experience, many consumers are weighing the options.

Why go and grab a quick meal when for just a few dollars more you can go and enjoy a sit down restaurant experience?

Fast Food’s Value

A cybersecurity consultant and regular diner,Tony Nix, captures the sentiment perfectly.

He said, “Fast food is generally supposed to be a less expensive alternative than going out to a sit-down restaurant. But it’s not becoming that at all. It’s becoming as expensive, if not more.”

Home Cooking Gains Popularity

In an explanation given by Business Insider, higher costs in dining out is leading people to home cooking.

The trend is obvious, as fast food becomes the more expensive option, grocery stores and kitchen stoves are gaining popularity, likely impacting fast food sales across the board.

The Influence Of Wages On Spending

California’s decision to increase the wages of fast-food employees to $20 an hour was aimed at bettering the lives of workers.

Unfortunately, it has caused a trickle down effect and increased the prices of the menu, prompting consumers to rethink how they allocate their dining dollars.