Fast Food’s Pricing Pullback Fails To Win Back Customers As Chipotle Tumbles 13%
After years of profiteering, fast-food chains finally relaxed price hikes, but the damage has already been done. With 40% raises since 2019, operators from McDonald’s to Wendy’s are fighting to win back customers with value deals. Despite their efforts, second-quarter earnings have unmasked persisting woes, with key players like Chipotle plunging 13.3% yesterday.
- The sector raised average prices by just 0.8% in May — representing the lowest in years amid a decreasing trend, per consultancy Revenue Management Solutions.
- Despite this, foot traffic dropped 0.9% year-over-year in May — with revealing a 4.9% plunge as the industry endured its 12th decline in 16 months.
The protein pivot: Thanks to higher prices that have priced out low-income consumers, diners are ditching steak and barbacoa for affordable proteins like chicken, which has doubled in consumption since 1970. With savings of $2 per entrée, one in four guests orders honey chicken at Chipotle, with peers like Taco Bell, Din Tai Fung, and McDonald’s now beefing up their poultry offerings. Value menus didn’t work as intended, but customers are taking the latest bait (as long as it’s breaded).
