Fast food price increse

[Revoltingest]

Yes, but in this case there is consciously tailoring prices to local clientele.

"What the market will bear" is a big factor.

I'm reminded of what some university students used
to whine about...."You charge more than it costs!"
Duh.
Why invest money, labor, & risk in property, only
to lease it out for no return, eh. I charged as much
rent as I could get....not always as much as it cost,
but usually more.

If ever you give up the life of a drone (employee)
to become a business owner, you too will want
to charge more than it costs.

 

[JustGeorge]

Upon some research, I learned that 40% of all meals in America are had at restaurants, including fast food. Personally, I find that incredibly high, but then mine is way under 1%.

Geez Louise! That would have to cost a small fortune!

I tend to use fast food to bargain/reward/distract one of the kids if he's having trouble. Its typically a last ditch effort, though. Not a daily thing.

 

[Vinayaka]

Geez Louise! That would have to cost a small fortune!

I tend to use fast food to bargain/reward/distract one of the kids if he's having trouble. Its typically a last ditch effort, though. Not a daily thing.

We used to do that. I ate more 'out' food in airports in the last 3 days than I will the rest of this year. Air Canada gave us vouchers everywhere we went. So it was free to us. In two weeks in the Sandwich Islands, we went out for ice cream ... twice. But yes, I'm on the Geez Louise train too.

But fast food is often cheaper than you think, due to bulk purchasing discounts on quite a few items. Some very large contracts from grower to chain for sure.

 

[JustGeorge]

We used to do that. I ate more 'out' food in airports in the last 3 days than I will the rest of this year. Air Canada gave us vouchers everywhere we went. So it was free to us. In two weeks in the Sandwich Islands, we went out for ice cream ... twice. But yes, I'm on the Geez Louise train too.

How do you feel after the change in diet?

But fast food is often cheaper than you think, due to bulk purchasing discounts on quite a few items. Some very large contracts from grower to chain for sure.

We used to do Burger King occasionally, based on the fact they had a veggie burger.

We ended up paying over 40 dollars to eat modest meals there... Nope.

 

[Quintessence]

Upon some research, I learned that 40% of all meals in America are had at restaurants, including fast food. Personally, I find that incredibly high, but then mine is way under 1%.

Could you link us in on the reference? I'm not believing that number until I see a source.

 

[Brickjectivity]

If they raise prices that's up to them. They'll have to compete against the better restaurants though. Why get McDonalds when you can get Panda Express for the same money? Why eat at Subway when you can eat at Sbarro's?

The cheapest breakfast when eating out? Surprisingly its eggs and bacon from Wendy's.

 

[JustGeorge]

If they raise prices that's up to them. They'll have to compete against the better restaurants though. Why get McDonalds when you can get Panda Express for the same money? Why eat at Subway when you can eat at Sbarro's?

The cheapest breakfast when eating out? Surprisingly its eggs and bacon from Wendy's.

On the unusual occasion we eat at a restaurant, it tends to be a sit down place, because they cost the same as fast food, and you don't have to clean up after yourself.

 

[The Hammer]

I spent 20 years in the fast food industry, and I've been telling people since the whole doubling minimum wage discussion began that they could expect price increase directly proportional to COGS.

The prices to produce the raw ingredients increase, so the plate cost increases. Combining this with the increase cost in labor, the cost is passed on to the consumer. At the end of the day, we've move nowhere, because the people who just received this wage increase find themselves spending that additional money on the price of goods and net no disposable income.

Sounds like we need to tax the rich owners more than. Because obviously they are pocketing the profits and not trickling it down and creating more wealth (besides themselves) with it.

 

[The Hammer]

It's the consequence of an economic system that promotes, enables, and rewards greed at every turn. California forced the capitalists in California to raise wages, so they are of course punishing the consumers for it. And blaming the workers. But no where else did, so no wages were increased enywhere else. Those price increases are just pure greed. And the increase will go strait into the capitalists pockets. Not to the workers they want us to blame.

Bingo

 

[McBell]

Could you link us in on the reference? I'm not believing that number until I see a source.

Not precisely what was claimed above.
However:

Roughly 49% of the money spent on food by Americans goes towards eating out.​

​

More than 50% of Americans’ food dollar expenditure is spent on food away from home (restaurants, take-out, delivery).​

​

Must-Know Americans Eat Out Statistics [Current Data] • Gitnux

Americans have long been known to enjoy eating out. From casual dining restaurants to fast food, Americans are spending a significant amount of their money on

gitnux.org

 

[9-10ths_Penguin]

I spent 20 years in the fast food industry, and I've been telling people since the whole doubling minimum wage discussion began that they could expect price increase directly proportional to COGS.

Why would that be?

I mean, this implies that the market before could have borne price increases but the business owners decided not to maximize their profit... why?

The prices to produce the raw ingredients increase, so the plate cost increases.

There would be a new equilibrium, but we wouldn't expect a direct "$1 increase in cost of inputs means $1 increase in cost of outputs." Supply and demand curves don't work that way.

... and the supply curve is shifting anyhow. An example is automated ordering: the cost of labour in, say, 1 hamburger is now lower than it was 5 years ago, so a dollar increase in minimum wage now represents a smaller percentage increase in the cost of that hamburger.

IMO, an even more important impact of minimum wage increases on the price of consumer goods is on the demand side: many of the business's customers now have more money, so they're now more willing to buy more of the product and more tolerant of higher prices.

Combining this with the increase cost in labor, the cost is passed on to the consumer. At the end of the day, we've move nowhere, because the people who just received this wage increase find themselves spending that additional money on the price of goods and net no disposable income.

Again: supply and demand curves don't work the way you're suggesting.

 

[Brickjectivity]

Not precisely what was claimed above.
However:

Roughly 49% of the money spent on food by Americans goes towards eating out.​

​

More than 50% of Americans’ food dollar expenditure is spent on food away from home (restaurants, take-out, delivery).​

​

Must-Know Americans Eat Out Statistics [Current Data] • Gitnux

Americans have long been known to enjoy eating out. From casual dining restaurants to fast food, Americans are spending a significant amount of their money on

gitnux.org

Interesting!

 

[Subduction Zone]

How do you feel after the change in diet?

We used to do Burger King occasionally, based on the fact they had a veggie burger.

We ended up paying over 40 dollars to eat modest meals there... Nope.

There is a way to eat at BK without spending a fortune. Be prepared. Get a flier with their specials on it and get just those. And as a compromise everyone has to agree no sodas or other sweet drinks. Burgers and fires at 5 to 8 bucks a person should be possible if you do that. They love to push the sodas because that is about 90% markup on those particular addons.

 

[JustGeorge]

There is a way to eat at BK without spending a fortune. Be prepared. Get a flier with their specials on it and get just those. And as a compromise everyone has to agree no sodas or other sweet drinks. Burgers and fires at 5 to 8 bucks a person should be possible if you do that. They love to push the sodas because that is about 90% markup on those particular addons.

We never do soda. Too expensive.

 

[Vinayaka]

Could you link us in on the reference? I'm not believing that number until I see a source.

You're right. all I did was a quick search and one question, and that stat popped out at me. Just now I couldn't find it again. But it's still high. There are lots of studies. Here's one: Fast Food Statistics | July 2023 | The Barbecue Lab

 

[Vinayaka]

How do you feel after the change in diet?

The entire diet changed for two weeks, not just the last two days. Actually airport food can be quite healthy. But yeh, the gut is still adjusting, but then my gut is always 'adjusting'.

 

[SalixIncendium]

Why would that be?

I mean, this implies that the market before could have borne price increases but the business owners decided not to maximize their profit... why?

Competition. There is a balance between profitability and being competitive. Increasing prices will only drive customers away to the competition.

There would be a new equilibrium, but we wouldn't expect a direct "$1 increase in cost of inputs means $1 increase in cost of outputs." Supply and demand curves don't work that way.

... and the supply curve is shifting anyhow. An example is automated ordering: the cost of labour in, say, 1 hamburger is now lower than it was 5 years ago, so a dollar increase in minimum wage now represents a smaller percentage increase in the cost of that hamburger.

IMO, an even more important impact of minimum wage increases on the price of consumer goods is on the demand side: many of the business's customers now have more money, so they're now more willing to buy more of the product and more tolerant of higher prices.

Of course we wouldn't, which is why penny profit analysis is based on percent increases rather than direct dollar ones.

Again: supply and demand curves don't work the way you're suggesting.

Huh? What I said has nothing to do with supply and demand.


I offered an insight to the OP's question based on my 20+ years experience managing restaurants the industry. I'm not interested in debating these insights. If you disagree with them, that's your prerogative.

 

[Revoltingest]

. In two weeks in the Sandwich Islands, we went out for ice cream ...

Did you try the local cuisine?
It's famous for....

Spoiler

Sandwiches

 

[Vinayaka]

Did you try the local cuisine?
It's famous for....

Spoiler

Sandwiches

This was the first time we tried shave ice, only because of the insistence of a friend. Other times we have eaten at the local place where the locals go. I've found, while traveling, that if you want the best food, go where the locals go. Same principle as going to where the truckers go on your Interstate highways. Of course the local fruit is fantastic, especially the papaya, and avocado. Fresh! Not mango season yet.

Of course, my restrictive diet restricts trying much of the local cuisine wherever I go.

Doi you go where the truckers go?

 

[Revoltingest]

This was the first time we tried shave ice, only because of the insistence of a friend. Other times we have eaten at the local place where the locals go. I've found, while traveling, that if you want the best food, go where the locals go. Same principle as going to where the truckers go on your Interstate highways. Of course the local fruit is fantastic, especially the papaya, and avocado. Fresh! Not mango season yet.

Of course, my restrictive diet restricts trying much of the local cuisine wherever I go.

Doi you go where the truckers go?

I spend time at truck stops.
But I eat food I bring with me.