You’re not going crazy if your coffee runs seem more expensive recently.
FinanceBuzz conducted a recent study that revealed the average breakfast price at fast food chains has increased by 53 percent since 2019. Some items have seen even steeper increases.
This report shows how labor costs and inflation have made breakfast a more expensive meal.
Breakfast prices rise faster than inflation
FinanceBuzz’s study of 10 major fast food brands found that the breakfast menu price has risen well above inflation, at 23%, since 2019.
This study focused not on coffee, but popular breakfast foods such as bagels and egg sandwiches.
Some chains like Taco Bell, CKE Restaurants or Hardee’s & Carl’s Jr. (parent of Hardee’s & Carl’s Jr.) have increased the price for breakfast by up to 72%.
Subway and Starbucks saw their breakfast prices rise by 37% and 32 %, respectively. However, these increases still exceeded inflation.
Hash browns saw the most dramatic price increase. Jack in the Box increased the price of this item by 149%, while other restaurants raised it from 23% up to 110%.
Hash Browns cost 77% more on average across all chains than they did five years earlier.
Fast-food chains are forced to increase prices to offset rising costs
Experts say that the breakfast price increase can partly be attributed to economic pressures on the industry.
Breakfast ingredients have been affected by the inflation of food products like eggs and potatoes.
During the morning rush, when consumers expect fast service and are accustomed to rising costs of labor, chains suffer particularly.
In a MarketWatch report, Arlene Spiegel, an American restaurant consultant based in New York said that the operator might need more staff if they want to keep up with speed.
Customers who buy breakfast are seen to be reliable and price-tolerant.
Mark Kalinowski is an analyst that follows trends in fast food. He suggests chains might feel more at ease raising prices for breakfast because many morning diners stick with their routines.
Kalinowski, in an article in the newspaper, noted that the operator could take advantage of your morning routine. This would mean that those who are in a hurry to start their day may not notice the price increase.
Breakfast prices are historically low, so even small percentage increases can appear to be significant.
The percentage increase in price of a cheap item such as hashbrowns is dramatic.
Source: FinanceBuzz
Fast-food chains are testing limits as they increase the price of breakfast.
FinanceBuzz found in its study that the price of breakfast items is rising more quickly than those for lunch and dinner at certain chains.
Breakfast items at Chick-fil A, for instance, rose 56% over the last five years versus a rise of 44% in items sold during lunch or dinner.
The trend indicates that the breakfast industry may face unique challenges, as operators are relying heavily on their loyal breakfast customers to accept higher prices.
This trend is not followed by all chain stores
McDonald’s faced criticism over its rising prices on the main menu. However, they saw an opposite scenario. Prices for non-breakfast products increased by 80% while those of breakfast items rose by 54%.
Can fast-food chains keep raising prices?
Some industry experts caution that despite these increases, chains might need to tread cautiously.
Steve Zagor is a restaurant expert at Columbia University and New York University. He warns fast food restaurants that they risk pricing their customers out of the breakfast market.
In a MarketWatch article, the author noted that some customers make their own eggs, which is a less expensive, but still convenient alternative.
Starbucks CEO Brian Niccol announced recently that the company will not increase its menu prices until fiscal 2025 in North America.
He said, “It is a good start but there’s more to be done to simplify and rationalize our pricing structure.”
McDonald’s introduced recently a value meal for $5, which includes a McDouble Cheeseburger with fries. This was to address complaints about rising prices.
Breakfast may need to be approached in a similar way to the value-based meals that fast food chains offer to entice customers to return for dinner and lunch.
Zagor says that the chains need to balance customer loyalty with profitability.
This post asked why breakfast prices have skyrocketed at Taco Bell and McDonald’s since 2019. This article may change as new information becomes available.
