It May Be Fast, But Is Fast Food Still Cheap?

Burger prices skyrocketing

Your neighborhood fast food restaurant is changing. It's fast, but may not be as cheap as it used to be.

"A five dollar lunch is getting much more difficult to find," said San Diego State marketing professor George Belch.

Industry researcher Claire Conaghan with DataEssential agrees.

"The burger price has risen from a median standpoint by 26 percent," she said.

What's with the change? Professor Belch says fast food restaurants are feeling the pinch from "fast casual" restaurants. Stores like Chipotle, Five Guys and others are offering higher-end menus and stealing customers. So places like McDonald's, Burger King and Jack in the Box are taking the challenge.

"They are making more gourmet, they are making them bigger," said Belch, "They're putting mushrooms and cheeses and all kinds of specialty things into them."

Conaghan says that's bringing in customers who are willing to spend more, "Now we have bacon, now we have swiss cheese, now it's grass-fed beef and Kobe or Angus and getting that higher price point."

So instead of a $5 value meal, prices are going higher and higher. At the McDonalds in the College Area, a Big Mac Meal cost $8.69, with tax that is 64¢ back on a $10 bill.

So a family of four that could once eat for under $20 is now facing a bill that might reach $30 or $40 according to Belch.

But he says it is not all about competing with fast-casual restaurants that is driving up prices. Belch says restaurants are now facing higher minimum wages, increased cost of packaging and overall ingredient prices.

Contact Us