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Americans are choking on surging fast-food prices. “I can’t justify the expense,” one customer says
Kevin Roberts remembers when he could get a bacon cheeseburger, fries and a drink from Five Guys for $10. But that was years ago. When the Virginia high school teacher recently visited the fast-food chain, the food alone without a beverage cost double that amount.
Roberts, 38, now only gets fast food “as a rare treat,” he told CBS MoneyWatch. “Nothing has made me cook at home more than fast-food prices.”
Roberts is hardly alone. Many consumers are expressing frustration at the surge in fast-food prices, which are starting to scare off budget-conscious customers.
A January poll by consulting firm Revenue Management Solutions found that about 25% of people who make under $50,000 were cutting back on fast food, pointing to cost as a concern.
For some of the nation’s best-known restaurant chains, losing lower-income customers means weaker sales, and potentially a dent to profits, said restaurant analyst Mark Kalinowski, president of Kalinowski Equity Research.
“When you look at McDonald’s, they’re not getting a majority of high-income customers — the middle- and lower-income class are the bulk of their business,” he said. “They need to be cautious with their spending, and that’s what you’re seeing right now.”
“Forget about it — I’m going home”
As fast-food prices have risen, recent earnings reports from industry leaders such as McDonald’s and Taco Bell parent Yum Brands show that same-store sales have slipped over the last year.
“The whole conceit was that you were getting some OK-level of food for a low price and you could get it quick,” Roberts said. “Now I can’t justify the expense. If I’m paying $15 for a burger and fry and drink and it’s McDonalds quality, forget about it — I’m going home.”
Casual dining restaurants are also feeling the absence of low-income Americans. The CEO of Dine Brands — which owns Applebee’s and IHOP — told CNBC this week that low-income customers are visiting their restaurants less frequently.
How much have fast-food chains raised prices?
Fast-food prices have shot up over the last decade, according to FinanceBuzz. The personal finance site found that the price of a McDonald’s Quarter Pounder with Cheese meal from McDonald’s more than doubled in price from $5.39 in 2014 to $11.99 this year.
Other restaurant chains also have jacked up their prices, FinanceBuzz said. Between 2014 and 2024, Popeye’s, Jimmy John’s and Subway hiked their food prices 86%, 62% and 39%, respectively. The price of a two-piece chicken combo at Popeyes jumped from $6.49 to $11.39 over that period, while an eight-inch club tuna from Jimmy Johns rose from $5.75 to $9.10, according to FinanceBuzz.
FinanceBuzz derived its data by selecting 10 menu items from each fast-food chain, using third-party websites like fastfoodmenuprices.com and menuwithprice.com to check the menu prices in 2014, 2019 and 2024.
To be sure, menu item prices at fast-food restaurants can vary wildly by state. While prices are set at the corporate level for some fast-food restaurants, they are determined by individual franchise owners at others.
Why are fast-food prices rising?
Restaurant chains point to rising labor costs as a key factor driving up prices. Across the U.S., 22 states raised their minimum wages in January, although the federal baseline pay remains stuck at $7.25 an hour. In California, fast-food chains with 60 or more locations nationwide are now required to pay their workers a minimum wage of $20 an hour following passage of a new law last fall.
Labor advocates dispute that rising employee wages are to blame for higher fast-food costs. A March analysis of California fast-food restaurants by the Roosevelt Institute, a liberal think tank, noted the industry’s record profit margins.
“Our analysis of financial data for the past decade finds increases in fast-food industry operating profits and rising markups, suggesting that affected employers can absorb the increased operating costs associated with a higher industry minimum wage without increasing consumer prices or reducing employment,” the report states.
Jack in the Box, Jimmy Johns, McDonald’s, Popeyes, Subway and Yum did not respond to requests for comment from CBS MoneyWatch.
For now, companies appear to be looking toward rewards points programs, discounts and mobile apps in an effort to keep customers loyal. But McDonald’s CEO Chris Kempczinski acknowledged the impact of rising prices last month in an earnings call.
“[A]cross almost all major markets, industry traffic is slowing,” Chris Kempczinski told Wall Street Analysis. “McDonald’s has a long history of being the go-to destination for value, and it’s imperative that we continue to keep affordability at the forefront for our customers.”
NEW YORK — Former New York Gov. David Paterson and his stepson were attacked in New York City on Friday night, authorities said.
The incident occurred just before 9 p.m. on Second Avenue near East 96th Street on the Upper East Side, according to the New York City Police Department.
Police said officers were sent to the scene after an assault was reported. When officers arrived, police say they found a 20-year-old man suffering from facial injuries and a 70-year-old man who had head pain. Both victims were taken to a local hospital in stable condition.
In a statement, a spokesperson for the former governor said the two were attacked while “taking a walk around the block near their home by some individuals that had a previous interaction with his stepson.”
The spokesperson said that they were injured “but were able to fight off their attackers.”
Both were taken to Cornell Hospital “as a precaution,” he added.
Police said no arrests have been made and the investigation is ongoing.
The 70-year-old Paterson, a Democrat, served as governor from 2008 to 2010, stepping into the post after the resignation of Eliot Spitzer following his prostitution scandal. He made history at the time as the state’s first-ever Black and legally blind governor.
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A 17-year-old boy was critically injured and a person is in custody after a gunman opened fire on a SEPTA bus in North Philadelphia Friday evening, police said.
At around 6:15 p.m., Philadelphia police were notified about a shooting on a SEPTA bus traveling on Allegheny Avenue near 3rd and 4th streets in North Philadelphia, Inspector D F Pace told CBS News Philadelphia.
There were an estimated 30 people on the bus at the time of the shooting, Pace said, but only the 17-year-old boy was believed to have been shot. Investigators said they believe it was a targeted attack on the teenager and that he was shot in the back of the bus at close range.
According to Pace, the SEPTA bus driver alerted a control center about the shooting, which then relayed the message to Philadelphia police, who responded to the scene shortly.
Officers arrived at the scene and found at least one spent shell casing and blood on the bus, but no shooting victim, Pace said. Investigators later discovered the 17-year-old had been taken to Temple University Hospital where he is said to be in critical condition, according to police.
CBS Philadelphia
Through their preliminary investigation, police learned those involved in the SEPTA shooting may have fled in a silver-colored Kia.
Authorities then found a car matching the description of the Kia speeding in the area and a pursuit began, Pace said. Police got help from a PPD helicopter as they followed the Kia, which ended up crashing at 5th and Greenwood streets in East Mount Airy. Pace said the Kia crashed into a parked car.
The driver of the crashed car ran away but police were still able to take them into custody, Pace said.
Investigators believe there was a second person involved in the shooting who ran from the car before it crashed. Police said they believe this person escaped near Allegheny Avenue and 4th Street, leaving a coat behind.
According to Pace, police also found a gun and a group of spent shell casings believed to be involved in the shooting in the same area.
“It’s very possible that there may have been a shooting inside the bus and also shots fired from outside of the bus toward the bus,” Pace said, “We’re still trying to piece all that together at this time.”
This is an active investigation and police are reviewing surveillance footage from the SEPTA bus.