HOMEWOOD, Ala. (WIAT/NN) – It’s going to cost you a little more to get a side of fries with your meal at your favorite fast-food restaurant. The National Restaurant Association reports a 7% increase in fast-food prices over the last year—the highest price jump in decades.
The association said that the last time prices jumped this high was over 40 years ago. Experts attribute the increased menu prices to higher input costs, particularly food and labor. And in some areas, experts also said that Big Mac price hikes are outpacing inflation and the cost of living.
According to the Big Mac Index, the price of the popular McDonald’s burger rose 7% last year. In the past 10 years, the price of the Big Mac jumped 40%. Studies show the most expensive places to buy a Big Mac are in cities that have a higher minimum wage. For example, in Austin, Texas, where minimum wage is $7.25, the burger costs about $3.75. In San Francisco, where minimum wage is $16, the burger costs $5.79. The highest price for the famed burger is in Seattle at about $6.39, where minimum wage is just over $17.
Signs at a St. Louis drive-thru inform customers that food costs more than the menu price during overnight hours, according to NEWS10’s sister station there, KTVI. And at WIAT, the affiliate in Alabama, there was a mix of reactions about higher fast-food prices.
“I keep being surprised that they continue to rise,” said Tish Patton of Homewood, Alabama. “I just think it’s important that those businesses continue to thrive. I would rather see them open and thriving than struggling and failing.”
In Homewood, many told WIAT off-camera that they weren’t willing to spend more than $10 for a fast-food meal. For Mason Sykes, he said he didn’t want to spend more than $12. “It’s crazy,” he said. “It’s just everything’s going up in the past year. I guess it’s all correlated to inflation—gas, groceries, fast food. We’re all taking a hit.”
“Any time there’s a rapid increase in the cost of gasoline, you’re going to see something like this happen,” said Dr. James Cochran, a business professor at the University of Alabama. “As long as supply is less than demand for gasoline, we will continue to see inflationary pressure.”
It takes a lot of gasoline just to transport wheat to a restaurant, for example. Cochran said many people depend on fast food because of price, proximity, and accessibility, but consumers have the option to consume less gasoline to switch up that supply and demand.
Cochran said it’s going to take time for fast-food prices to come down, but for some families, these prices have already hit the tipping point. “It’s not going to come down simply through reducing demand to where the prices were a year ago,” he said. “We’re going to have an influx of supply in order for that to happen.”