MicroWaveMay 12, 2024

Americans are choking on surging fast-food prices. "I can't justify the expense," one customer says

https://lemmy.world/post/15328109

Americans are choking on surging fast-food prices. "I can't justify the expense," one customer says - Lemmy.World

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 [https://www.revenuemanage.com/wp-content/uploads/2024/02/Feb24-RMS-RestaurantConsumers-General.pdf] 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.

Show threadLostWandererMay 12, 2024
That’s pure greed at this point…Jimmy John’s is still well in an affordable range. As a rule, I tend to avoid buying food from places with surge pricing as fast food is supposed to be affordable! It’s not fine dining and as a result should be priced appropriately; they’ve forgotten their role in the food space and thus their business will live or die based on future choices.
Show threadcredo
Fast food was affordable because they paid sweat shop wages. That’s not the case anymore. In any event… I would argue with the “supposed to be” affordable comment. Just because it was doesn’t mean it’s supposed to be. As far as I’m concerned this can only be good for the health of the public- when fast food prices are at least comparable in price to healthy options.
May 12, 2024 at 5:53pmWeb
Show threadMoopsMay 12, 2024
I won’t believe paying fast workers a liveable wage necessitates the rise in cost unless there’s hard data behind that. Sure, it’s likely a necessity to continue profit growth quarter after quarter, but I’d wager they’re able to continue making massive profits even with having to pay their staff like they’re humans.
Show threadNeuromancerMay 12, 2024

Since labor is a cost. You just defeated your argument.

If labor goes up, prices will go up. It’s that simple. Fast food is only profitable at high volumes. Their profit margin is only around 10% which is low.

Show threadblackbelt352May 12, 2024
My guy, it’s cheaper to get a big mac in Norway than in the US and their lowest wages are more than double ours in the US.
Show threadArbiterXeroMay 12, 2024

Yes but the owners in Norway aren’t making more profits than last year.

The whole problem isn’t that they’re not making good profits, but that it’s not exponentially growing profits.

Greed.

Show threadRemmockMay 12, 2024
McDonald’s in Europe charges similar prices to America but pays living wages to their employees.
Show threadgivesomefucksMay 12, 2024

Bruh, McDonald’s exists in other countries…

A big Mac in the Nordic countries costs like a dollar more than America, and their workers get the equivalent of like $20 some an hour, paid vacation time, and the company actually has to pay taxes.

It ain’t the labor that’s expensive.

It’s not the ingredients either.

It’s the profit rate to keep shareholders happy

If that arrow always has to go up, it’s the one thing that’s literally impossible to ever go down.

Show threadKid_ThunderMay 12, 2024

Fast food was affordable because they paid sweat shop wages. That’s not the case anymore.

McDonalds gross profits are $14.68B over the last 12 months with over 9% year-over-year growth.

They aren't struggling and other than covid (which just held steady for a few years at $10B), the trend has been going up, not down, not stagnant for many years.

Remember that's gross profits. If wages were hitting them hard, then we'd see the trend at least level off, if not decrease but that isn't what happened or is happening.

Show threadcredoMay 12, 2024
Yes, you’re comparing COVID lows with today’s returns. That’s perfect. Not that I give a damn about franchise returns. I just don’t eat there.
Show threadKid_ThunderMay 12, 2024

Yes, you’re comparing COVID lows with today’s returns. That’s perfect. Not that I give a damn about franchise returns. I just don’t eat there.

I was not in so-much as saying that they are simply increasing due to COVID's stagnant for a few years. The increase in gross profit is a 9% rate of increase year-over-year for 10 years. The trend increase has been going on for nearly 15 years for McDonalds with a slight decline during 2008. Their increase trend from COVID as an example from 2021 to 2022 was 'only' 4.98% and after it picked up to 10.26% from 2022 to 2023.

Do you have any idea what “gross” means? You’re literally including the increase to wages in your argument.

Alright so let's talk about their net profit. Their net profit over the last 12 months is $8.6B compared to $5.1B in 2018, $7.5B in 2021.

Their net profit, like with their gross profit has a clear upward trend. Wages haven't hurt McDonalds growth and they certainly, once again, aren't close to struggling or in-fact at risk of not meeting investor's expectation of ROI growth.

Your argument is full of false assumptions when the empirical evidence is clear. You're basically saying "wage increases means McDonalds is making less money and therefore prices need to increase" without any regards to supplier pricing, sales volumes, organizational efficiency or in regards any other operational factors.

It is an ignorant and frankly terrible argument and is nothing more than a wild ass guess on your part.

Show threadRottcoddMay 12, 2024

They thought by raising wages, owners would cut into their own bottom lines.

I don't think anyone actually thought that.

They're simply making the point that the problem is not the wages paid to the employees, as you imply, but the obscene salaries paid to executives and franchisees.

That the American execurives and franchisees are not going to take the necessary steps to correct that problem pretty much goes without saying, but that doesn't in any way change the fact that that is the problem

Show threadcredoMay 12, 2024
The profits today aren’t any different than the profits from 15 years ago (when fixing for economic growth). I’ve already done the math. The only significant variable that’s changed here is wages. I.e., expenses.
Show threadRottcoddMay 12, 2024

Undoubtedly.

And that in no way contradicts, or even really addresses, my point, which is not about overall expenses, but about the distribution of them - the portion that goes to employee wages vs. the portion that goes to executive compensation packages.

Show threadsteakmeouttMay 13, 2024
Why are you complaining that wages are on the increase? Who’s paying you?
Show threadcredoMay 13, 2024
Point out that complaint please.
Show threadsteakmeouttMay 13, 2024

Fast food was affordable because they paid sweat shop wages. That’s not the case anymore.

Show threadcredoMay 13, 2024
And you read that as a complaint? That’s your issue if you interpret plain facts as complaints. Feel free to read a little more thoroughly.
Show threadMaeveMay 12, 2024

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.

Edited for formatting

Show threadtburkholMay 12, 2024

2023, McDonald’s net income $8.5B on $25B revenue, or 34% net profit margin. 2009 net income $4.5B on $23B revenue. 20% profit margin.

Over the time period that you picked, their profits - the money that they don’t pay to either workers or farmers - nearly tripled as revenues barely changed.

Show threadspadufMay 12, 2024
Fast food absolutely still pays well below a living wage in most of the US