Fast food has become a luxury in California, a franchisee says

Fast food has become a luxury in California, a franchisee says
Pls share this post


Listen to this article
Photo of hands holding a hot dog and fries covered in ketchup. Some ketchup is on the table
A combination of wage and labor inflation pushed fast-food prices up during the pandemic.

  • Some diners now think fast food is a “luxury” as prices creep up, a California franchisee said.
  • A combination of wage and labor inflation increased fast-food prices during the pandemic.
  • Restaurants in California are raising their prices again to offset the state’s $20 fast-food worker wage.

A California franchisee has warned that some of his customers think fast food is becoming a “luxury” as restaurants increase prices to cover the state’s new $20 minimum wage for fast-food workers.

Brian Hom, who owns two branches of smoothie and Acai bowl chain Vitality Bowls in San Jose, told Business Insider that the price hikes could be scaring off diners.

“I’ve had some customers say: ‘the cost of going out is so high now, I’m looking to buy my own ingredients and make my own food at home because going out to a fast food has become a luxury’ versus ‘hey, I want to go get something to eat now,'” Hom said.

READ ALSO  The new American dream: leaving America

“They have to think twice: ‘Am I going to be able to afford it or not?'” he continued.

The new wage in California comes amid rising prices of fast food across the US more generally. A combination of wage and food inflation pushed prices up during the pandemic, and some diners say they’re cutting down on how much fast food they eat because it’s no longer affordable.

Hom said that his two stores had already changed their prices twice this year: He increased them by about 5% in January, when San Jose’s minimum wage went up from $17 to $17.55 an hour, and then by between 5% and 10% on April 1, when California’s fast-food worker wage came into force.

READ ALSO  Google is co-funding a guaranteed basic income trial that gives families $12,000 a year to help keep them housed

Other fast-food franchisees have also expressed concerns that raising prices to absorb California’s new wage could push customers’ willingness to pay to the limits.

“The appetite that my customers have for price increases is not unlimited,” Scott Rodrick, a McDonald’s franchisee with 18 restaurants in northern California, previously told BI.

Franchisees worry that some diners will turn to casual-dining chains like Chili’s and Applebee’s instead, some of which may offer a sit-down meal for only a few dollars more than fast-food restaurants. Some franchisees and analysts say they also expect people to buy more groceries, too.

“Fast food is generally supposed to be a less expensive alternative than going out … to a sit-down restaurant,” Tony Nix, a 55-year-old cybersecurity consultant in California who says he typically eats out three times a week, told BI in March.

READ ALSO  The FBI told passengers of the Alaska Airlines blowout flight they may be victims of a crime, report says

“But it’s not becoming that at all. It’s becoming as expensive, if not more,” he said.

Is fast food no longer affordable? Email this reporter at [email protected].

Read the original article on Business Insider

Source



Pls share this post
Previous articleStudent-loan borrowers have delayed buying a home or car, having kids, and getting married because of their debt — even for those with balances smaller than $10,000
Next article10 African countries with the highest consumer prices in 2024