5 Restaurant Chains That Raised Their Prices the Most
If there is something that everyone in the restaurant industry is talking about these days, it's pricing. Skyrocketing food costs are putting pressure on chains to find the sweet spot of what customers are willing to pay in order to fine-tune profit margins.
The unfortunate truth is that there is no escaping the inflation and its effects on restaurants. When chains aren't raising prices, they're finding other ways to cut costs—either by closing unprofitable locations, cutting back on labor, or coming up with new value deals that may entice higher check averages. It's a tightrope walk before diners begin to notice declining quality or feel like fast food is simply becoming overpriced.
So, while there is no winning the inflation game, simple price hikes may be a more honest way to go (when keeping in mind the extra cost typically falls on the consumer). With that in mind, here are the chains that have either raised their prices or have plans to – for better or for worse.
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In an earnings call in February, Former CEO Kevin Johnson said the company has "taken pricing actions" in October 2021 and January of this year, and has additional plans for more increases later this year.
CBS reported in February the price of a Venti (large) coffee was $2.45 in 2021 but is now $2.95 in some locations, which is an increase of 20%.
McDonald's just isn't the ultra-cheap food stop it used to be, thanks to the soaring prices of meat. Coupled with increased wages for workers, customers are shelling out more than ever for a Big Mac.
McDonald's hiked its U.S. pricing by roughly 8% compared to a year ago, according to CFO Kevin Ozan's remarks on an earnings call in April. The year before, the chain bumped prices up by 6%.
The fast-casual food chain known for its Tex-Mex burritos and bowls raised its prices 4% across the menu in December, citing an effort to offset food and labor costs.
The move capped off an overall 10% increase in prices across the board since last year, which CEO Brian Niccol confirmed during an earnings call in February.
Bloomin' Brands, the parent company of Outback Steakhouse, announced that it would bring pricing up about 5% this year. The increase rides the tail of a prior 3% increase, which the brand said wasn't enough to offset "inflationary pressures."
Wendy's made a bold move of raising prices twice in two years. Last year, the company increased its menu prices by 6%, according to CFO Gunther Plosch. He also confirmed, during an earnings call in March, that the prices will go up by another 5% in 2022.
While Wendy's plans on raising prices, it will push its affordable options like its Biggie Bags to "strike the right balance and maintain value perception," according to Plosch.