- Fast food prices are rising across the industry.
- Dunkin’, McDonald’s, and Taco Bell have seen the biggest increases, according to analysts.
- Shipping issues, labor shortages, and weather events all contribute to rising prices.
- See more stories on Insider’s business page.
Prices at fast-food chains will continue to rise as ingredients and labor grow more expensive.
Chipotle raised prices across the menu by about 4% in June, a move the company says was prompted by increased wages for workers.
The average Chipotle meal will cost 30 to 40 cents more than it did before, and a spokesperson told Insider that the price hike will compensate for the recent wage increases for workers. In April, the fast-casual chain said it would raise average hourly wages to $15 per hour by the end of June, an increase of $2 over the $13 an hour average pay.
Nearly every fast food and fast-casual chain will likely follow, according to analysts at Gordon Haskett in a report released Thursday.
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Analysts looked at 24 restaurant chains over the span of a year and found 17 of them are currently running price increases, and price increases, on the whole, are growing in both size and frequency. Quick service restaurants have seen the largest increases, averaging 6% compared to 3% at fast-casual and 1% in casual chains. Most of these increases have been implemented since March 2021.
Based on Gordon Haskett analysis, the greatest price increases have been 10% at Taco Bell, 8% at McDonald’s, and 8% at Dunkin’, follow by Chipotle and The Cheesecake Factory. Exact prices vary by market. Applebee’s, Papa John’s, Red Robin, and a few others have not adopted any price increases over the past year.
Labor costs are partially the cause of these rising prices. A truck driver shortage is making transportation more expensive, while restaurants, grocery stores, and factories are all struggling to keep fully staffed. Processing plants and farms are facing the same problems, for example, chicken farms don’t have enough employees, so they’re struggling to process birds quickly.
Labor costs might have increased for restaurants over the last year, but so did the price of ingredients. US consumer prices hit their highest level in 13 years in May, increasing 5% over the previous year. Staple Chipotle items, like corn and avocados, grew more expensive this year as demand rose and shipping delays drove prices further up. Experts say rising food costs are a combination of growing demand as consumers increase spending and supply chain struggles. Shipping delays and severe weather events have made crucial commodities more expensive and difficult to obtain.
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