Is fast food becoming a luxury?
Yes, say four-fifths of Americans in a new survey about fast-food inflation.
Fast food prices are up 4.8% since last year and 47% since 2014, according to the Bureau of Labor Statistics.
In a new survey of more than 2,000 consumers, the personal finance site LendingTree found that many diners are wincing at their restaurant receipts. Among the findings:
◾ 78% of consumers said they view fast food as a luxury because of its cost.
◾ 62% said they are eating less fast food because of rising prices.
◾ 65% said they’ve been shocked by a fast-food bill in the last six months.
◾ 75% said it’s cheaper to eat at home.
The LendingTree survey, conducted in April, was published May 20.
“For generations, American families have looked at fast food as a relatively cheap, inexpensive option for nights where you don’t want to cook after work, or you’re bringing the kids home from soccer practice,” said Matt Schulz, chief credit analyst at LendingTree.
Want a cheap meal? Make it yourself, consumers say
Yet, as prices rise, opinions are changing. When the LendingTree survey asked consumers to name their typical go-to choice for an easy, inexpensive meal, 56% chose “making food at home.” Only 28% picked fast food.
The fast-food price surge inspired a recent USA TODAY analysis of combo-meal prices at five major burger chains. The report found that a Big Mac combo now costs nearly $15 in Seattle. It tracked rising prices across the board, topping out at $20 for a meal at Five Guys.
Earlier this year, a Five Guys receipt totaling $24.10 for one meal went viral, sparking a heated debate about runaway fast-food prices.
"It's so upsetting because it goes against what we are expecting and what we have grown to love about fast food," which is its affordability, said Kimberly Palmer, personal finance expert at NerdWallet.
On top of the sticker shock, rumors circulated recently that Wendy’s and other chains were experimenting with “surge pricing,” the technique of charging customers more at peak hours.
Officials at Wendy’s assured customers they had no surge-pricing plans. Nonetheless, in the LendingTree survey, 78% of Americans said they are concerned about surge pricing.
“There’s kind of the perception or the feeling that some businesses are bumping up prices more than they need to because of inflation,” Schulz said.
Fast-food sticker shock: Diners may be retreating from the drive-thru
Industry data suggest diners may be retreating from the drive-thru.
Several fast-food chains, including McDonald’s and Wendy’s, charted a decline in business in the last quarter “as low-income customers have pulled back from spending,” according to the industry journal Restaurant Dive.