$10.19 Big Mac? Fast food myth-busters explain why McDonald's is so expensive now.
Is cheap fast food over?
A Big Mac value meal with a fudge sundae.
For nearly 70 years, McDonald’s has been the place for an affordable, quick, and predictable meal. However, since 2019, McDonald’s prices have risen drastically, and in many places, it now charges fast-casual prices for fast food, even though the quality is the same. What gives?
Over the past five years, the prices of McDonald’s most popular items have risen an average of 141%.
The Food Theorists, a YouTube page with over 5.4 million subscribers that debunks fast food myths and tells the stories behind your favorite food brands and mascots, explains the hefty price hikes in a 9-minute video.
The primary takeaway is that McDonald’s locations are all franchises, so the individual owners have the right to charge what they wish for a product. That’s why a McDonald’s in Darien, Connecticut, charged $17.59 for a Big Mac value meal. There was no nearby competition and consumers driving by on the interstate had fewer food options.
Food Theory: Why Did McDonald's Get SO Expensive?youtu.be
Conversely, in San Jose, California, one of the most expensive places to live and do business, a Big Mac is still relatively affordable ($5.79) because competition in the area keeps prices down.
Therefore, in an inflationary environment where prices are going up on everything, McDonald’s franchises can raise their prices to whatever consumers bear without facing any business consequences.
“If owners see one place is still thriving with higher prices, they'll increase theirs to get more money, especially when there's a need for what they're selling,” Food Theorists say in the video. “Basically, they can drive up prices to match competition because customers won't stop wanting McDonald's.”
The question is, when does the cycle stop? If businesses continue to one-up each other by raising prices with little consequences, at what point does all fast food become super expensive? When companies with lower prices begin to thrive, the expensive businesses, like McDonald's, are forced to return to Earth.