Michael Bordenaro: Fast Food Customers Have Had Enough of the High Prices!

For decades, customers have flocked to fast food for its speed and convenience. Fast food companies have leaned into customer demand by creating services such as the drive-thru to cater to customers on the go.

However, while it was never expressly stated, customers also expected fast food to be cheap as well. Companies that offered value menus or dollar menus were able to lure in potential customers based on low prices.

Thanks to inflation, the costs of having such value menus has gone away. And many customers now going out for fast food are seeing sticker shock.

Most major fast food restaurants have increased their prices in excess of the inflation of recent years. Of all the fast food chains, McDonald’s (MCD) has increased their prices the most on average, while coffee chain Starbucks (SBUX) has raised prices the least.

Meanwhile, these companies are also using tools such as self-serve kiosks and robotic cooking devices to save on the costs of human labor.

While those cost savings are key, the overall high prices could lead to customers moving away from eating fast food as often as they have been.

It’s possible that the economics of the fast food industry have changed for the worst. And that investing in the stocks of these companies may not offer the great returns they’ve had in the past.

To listen to the full breakdown on rising fast food costs, click here.