At dinner last night the subject of fast food prices came up. We all agreed that prices seem to have skyrocketed recently, which I said was kind of mysterious. After all, the federal government tracks fast food prices, just like they track everything else, and the numbers are easy to find. Here they are:
Since 2021, fast food is up 23%, which is a little more than general inflation but only by a few percentage points. That's about six points more than average wage growth.
Maybe prices have gone up more in Southern California, where we happen to live? The BLS doesn't track fast food specifically for LA and Orange Counties, but they do track eating out in general. It turns out that Southern California's overall restaurant inflation is slightly less than the national average, so its fast food inflation probably is too.
So it's weird. I too feel like some of the common fast food items I eat are substantially higher priced than they were a few years ago. As in 50% higher or even more. And yet BLS statistics say I'm wrong. What's going on?
Not much of a fast food guy but pre pandemic if I got the urge I would stop at McD's for a #10 meal. Two cheeseburgers, large fries and soda. It was $8.59 incl tax in the Phila region. During the pandemic the price climbed to close to $12 but I was pleased to see that recently it was $8.97 at the store near my house.
I think a lot of it is beef prices -- they've come down quite a bit off their highs a year or two ago, but a lb. of steak or hamburger is about 65% more expensive now than it was in that golden year of 2018-19 that everyone seems so fond of these days.
The cause was mainly a severe drought that impacted TX, CO, OK and NE over the past several years. Nobody ever mentions that. And expect bird flu culls to continue keeping poultry prices higher, too.
I could swear that I've encountered the same thing as Kevin quite a few times in the past couple of years. I think people are greatly underestimating how much things cost in 2019. I get the feeling that various prices had gone up a lot in the 10 or more years before 2019, but I (and many others) still think of the "correct" price as the the earlier price. Something may have cost $20 in 2019, but I remember when it only cost $10 so I think $10 is the "real" price. So when I look today and see it cost $21 I think that it has doubled in price. And it has, but not since 2019.
On a related idea, my wife has complained at least once a month about grocery prices for the last 20+ years. So when she goes to the store now she declares that prices have greatly increased in the past few years, but no. They are higher, but only a little higher then 2019.
(Wow! 2019 was 5 years ago. Time flies.)
I think this is true. People talk as though a Big Mac meal in 2019 cost 50 cents or something and now it's a day's pay and all Biden's (or now Harris's, I guess) fault. Even under the 2-3% Trumpflation rate back then that everyone pines for, the Big Mac meal would still cost about 15% more today than it did then. Instead, it costs about 25% more -- so 10% higher than usual because of I dunno evil soshalism or whatever.
Innumerate people who have no clue how economics or government work are why we can't have nice things.
I think I agree. I "feel" like my $10.50 go-to Taco Bell meal was $6 pre-pandemic, but that might actually have been more like 10 years ago. Time does fly.
The chart starts at 2021. A chart that covered, say, a twenty year period would show if there is a substantial change in the slope of the line (essentially an inflection point). That's what people are complaining about, the change since the before-times.
Also, the line for wages is for... all wages, including white collar workers? Blue collar workers are more likely to eat at fast food restaurants. Show a chart for their wages trajectory.
Kevin's obsession with denying inflation concerns leads him to repeatedly truncate graphs, overlay 2nd order polynomial curve fits, and select broad wage categories, which obscures what's really happening.
Look at the legend on the chart: "Growth Since Start Of Biden Administration". I think it makes Kevin's point clear -- he chose the time period shown based on the current political discourse. If he wanted to show historical inflation he'd have used a different starting point (and has done so in the past).
Get your own blog if you got a problem with this. And stay off of my lawn.
Greed got the better of fast food and folks rebelled by not buying. Ah, lesson learned for the greedy, for a bit, some of the prices came down and they are touting meal deals trying to get folks back.
I find fast food prices inconsistent - some haven't moved (like Costco), others went up by alot. Some even by double. But certainly more than wages. Unlike other inflation.
(And geez, you seem to have banned the IP range of public wifi in San Jose, couldn't post yesterday.)
Costco is likely… different. Their food counters are no longer open to the public. Available to members only. So their calculus will differ from a fast food joint’s.
Their food counters are inconsistently open to the public. The one in Sunnyvale still is.
Heck, they're inconsistent whether they scan stuff in carts or take everything out.
But my point was that inconsistency may not be reflected in statistics.
Kevin, lending credence to impression?!? Inconceivable! After all, aren’t we all supposed to be comparing prices in our heads based on inflation adjusted figures?
Fast food restaurants have different menus for different customers. At In-N-Out Burger, you can order a customized Flying Dutchman; at McDonald's, a McGangBang; at Shake Shack, a Shandy. Those are all items on the restaurants' "secret menu," not the regular menu for most customers.
Same goes for prices. There's the BLS menu that uses regular prices, which most people pay. There's also the vibe pricing menu, with higher prices they charge customers who are Republicans (or who look like they might be Republicans). I'd suggest wearing your "Harris 2024" T-shirt next time and enjoy the lower prices.
(In some fast food joints, you can wear a Bernie Sanders T-shirt and get discounts below the BLS menu pricing, but I don't know if that works in Orange County.)
Eh, 20% seems about right. IIRC, the rise in fast food prices coincided with the rapid increase in wages being offered to workers as the economy began to heat up in the middle of 2021. Around my neck of the woods, wages went from ~$10/hr to ~$17-$20/hr in a very short time. Shortly after that the cost of my weekly Wendy's Baconator and fries shot up.
I think what has happened is that prices have crossed an emotional threshold. It’s why a price for an item is $9.99 instead of just saying $10.00. So if something was $9.99 and is now $12.49 it seems like a bigger deal than it actually is. Your mind is thinking it used to be 9 bucks and now it’s 13 (or even 15). So then when you notice you might think “wow, prices are way up. How does a family of 4 afford even going to a fast food restaurant these days?”
Plus, prices have doubled and more for some items. That $5.00 Foot Long sandwich deal that Subway used to offer was discontinued 5 years ago. Just checked, and that sandwich (without any promotion) is $13.00. That promotional price is locked in my brain and $13.00 seems outrageous.
"I think what has happened is that prices have crossed an emotional threshold."
I doubt that this is what changed.
What changed is that the right has now a propaganada machine that can create a crisis out of thin air.
Both things can be true.
I agree with regard to “crime” and “illegal immigration!!!” but I do think that with regard to some food items there is some emotional and real sticker shock. For instance, I found that Subway price pretty surprising. I haven’t been there in several years so that might have something to do with it, but that commercial is pretty locked in my brain and I would have found the current price shocking propaganda machine or no.
If you assume the price of a Big Mac is a good proxy for overall fast food prices this is interesting: https://www.stlouisfed.org/on-the-economy/2024/apr/how-big-mac-index-relates-overall-consumer-inflation
Two observations:
It looks like Big Mac price inflation lags CPI inflation.
What happened around 2012 when prices took off. Was this some kind of lagged price increase after the big real estate bubble collapse?
"... And yet BLS statistics say I'm wrong. .."
I expect you notice the prices that are up a lot more than the others. And it could be that the stores and menu items you prefer have gone up more than the average.
Is it true that every franchisee has to charge the same prices?
If not, is it possible that prices increased faster in wealthier areas than poor areas?