In the age of continuing inflation, Chick-fil-A has upped its prices by a whopping 21 percent over two years.
The chicken chain first hiked up prices in 2022 by 15 percent, making its classic chicken sandwiches a bit more out of budget for many Americans, according to Food Truck Empire. Then in January 2023, the restaurant adjusted its prices once again, invoking a menu-wide increase of 6 percent.
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Taken together, customers are seeing a 21 percent jump on any given order.
Newsweek reached out to Chick-fil-A for comment.
According to Aaron Anderson, the CEO and founder of franchise consulting firm Axxeum Partners, inflation has seen the price of ingredients alongside packaging and transportation skyrocket. Supply disruptions also contributed to the scarcity and higher prices of certain items, he said.
And that’s without even taking into account the shifting labor market restaurants found themselves in during the pandemic, where many employees left their jobs on the frontlines and demanded higher wages.
“There’s been a significant rise in labor costs due to a more competitive job market and increased minimum wages in many areas,” Anderson told Newsweek. “Restaurants are spending more on wages and benefits to attract and retain staff.”
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When it comes to how customers react to price hikes, brand loyalty often comes into play. Still, for a large percentage of low-income Americans, their favorite fast food chicken chain might end up out of reach.
“Higher menu prices can lead to reduced frequency of visits or spending per visit by consumers,” Anderson said. “Some may switch to lower-priced alternatives. However, Chick-fil-A’s strong brand loyalty might mitigate this impact to an extent.”
While Chick-fil-A is invariably looking to boost its revenue with the price jumps, the brand also risks alienating a key group of price-sensitive customers.
Because Chick-fil-A is a fast food chain that caters to lower to middle-income Americans, Michal Strahilevitz, the director of the Elfenworks Center for Responsible Business and a professor at Saint Mary’s College of California, anticipates a substantial number could turn away from the restaurant.
“Many customers might reconsider their dining choices due to financial constraints, exacerbated by the rise in layoffs and the general rise in inflation and costs beyond Chick-fil-A,” Strahilevitz told Newsweek.
Those who do remain loyal may end up visiting the chain less frequently or cut back on their orders.
“Restaurants must find ways to offset the costs though, without passing it all onto the customer or they risk losing their customers,” Sam Zietz, the CEO of self-ordering restaurant tech company GRUBBRR, told Newsweek.
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Zietz recommends restaurants look into ways to reduce labor costs primarily, potentially by adding self-ordering kiosks to hire fewer cashiers and making ordering more efficient.
Several other fast-food chains have shifted their menu prices as a result of inflation. With customers complaining over McDonald’s dollar menu no longer containing dollar prices to the utter lack of $5 footlongs available at Subway these days, shoppers are frustrated by how little their money can stretch even amid some of the cheaper restaurant options around.
In 2022, fast food prices soared upwards by 13 percent, according to Pricelisto, an organization tracking fast food menu prices.
And now that California instituted a $20 per hour fast food minimum wage, even more restaurants are set to bump up prices for consumers. So far, Chipotle and McDonald’s both announced additional price hikes to offset the costs in the state.
Food prices in 2024 were predicted to surge by 2.9 percent, nearly half of the 5.8 percent price increases seen in 2023, the U.S. Department of Agriculture said in November.
“The USDA is predicting that food costs will only continue to rise in 2024, so I don’t think this is the end of rising menu prices,” Zietz said. “It may slow, but as food costs continue to rise, so will the cost of eating out.”
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Category: WHY