Amid Inflation, Burger Chains Have Shown Interesting Progress

3 mins read
The three largest burger chains in America show contrasting progress
The three largest burger chains in America show contrasting progress

The high prices of food items such as burgers and other fast foods have caused many people to forgo these purchases, with chain restaurants suffering from losing clients. According to the U.S Bureau Labor Statistics (BLS), price spikes are reaching levels last seen 40 years ago.

Forbes reports that in the past 12 months, electricity prices have increased by 12%. Utility gas services went up 30% and meat, poultry, fish, and eggs up 14%.

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The recent increase in food costs has left many people feeling overwhelmed, but the reality is that these increases are necessary. Meanwhile some chains have suffered heavy losses because of this economic turmoil, like burger restaurants, which has seen fewer customers.

However, McDonald’s has done better than other burger chains in the face of increasing competition. Data company Placer.ai reports that visits were up 6.3% and 3.8% compared to last year in April and May.

The fast food burger chain has seen more foot traffic for the past half year compared to last, which gives people a reason to believe that their changes in 2021 will pay off. In particular, raising the bar on its celebrity collaboration and loyalty program.

Meanwhile, Wendy’s and Burger King are having a hard time with traffic because of the current economic climate. 

After reporting an increase in yearly visits, Wendy’s and Burger King fell behind their 2019 traffic levels by 12.1% and 12.4% in May.

It is speculated that Wendy’s 6% menu price increase last year may have contributed to its current endeavors. Additionally, the chain confirmed plans in 2022 for another 5% increase.

“We did talk about taking 5%-plus pricing,” said Todd Penegor, president and CEO of Wendy’s. “We’ve got to find that point where we can balance passing on some price but still being of relative value to the consumer.”

The largest franchisee of Burger King, Carrols Restaurant Group is also having problems.

“Even if inflation moderates in the back half of this year, we’re likely to feel its impact on our cost structure for some time,” said CEO Paolo Pena. “To deal with it, we are going to need to adapt and evolve as never before. And to do that, we are going to need to look at all aspects of our operations with fresh eyes.”

While the world is recognizing a lot more fast food chains than ever before, it seems that not all are experiencing this growth. Placer.ai on their latest data shows some regional favorites like In-N-Out Burger and White Castle seeing growth in visits.

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Opinions expressed by Market Daily contributors are their own.

Stephen Cook

Stephen is a dedicated businessman and an angel investor. He usually features his written works in several business blogs and works as a marketing consultant to various companies.

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