Fast food prices keep rising at record rates and there's no end in sight
Fast foodprices increased at the highest rate since BLShas tracked them. Krispy Kreme, Wendy's, and other chains shared newsabout rising prices in earnings calls.
Prices at limited service restaurants, meaning fast food and fast casual, rose 7.1% compared to last October, according to new data released by the Bureau of Labor Statistics. Prices at full service restaurants rose 5.9%. Both were the highest increases since the BLS has recorded these numbers.
The price increases on menus are rolling out across the country. Krispy Kreme shared that it rose prices in the "low single digits" in September, with plans for additional increases in the fourth quarter. Prices have to go up to cover higher costs, particularly for drivers in the case of Krispy Kreme, but customers are largely willing to pay up. CEO Mike Tattersfield said that customers are willing to pay up to 50% more for specialty doughnuts.
Fast food prices have risen throughout the year. In July, Insider reported on some chains raising prices as much as 10%. The greatest price increases were 10% at
Labor costs are partially the cause of these rising prices. Chains like Krispy Kreme and Domino's have acknowledged difficulty hiring enough drivers, key to both company's business models.
Business owners say they're unable to find staff and in some cases even cite a lack of desire to work, while workers say they can demand better pay and benefits in the tight labor market. This mismatch has led to restaurants decreasing hours and closing dining rooms. A survey from the National Restaurant Association, 78% of owners said that they didn't have enough workers to handle business. In another survey from Black Box Intelligence, 33% of restaurant workers said that they hoped to leave the industry by the end of the year.
Ingredient prices have also skyrocketed, another piece leading to menu changes. Meat, poultry, fish, and egg prices all rose year over year, according to the BLS data. Pork prices rose 14.1%, their highest ever increase in BLS history, and beef prices increased a whopping 20.1%.
Rising prices don't seem to be hurting the growing popularity of fast food, though, as major chains including McDonald's and Taco Bell have announced sales surpassing 2019 and 2020 levels.
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