Brief - The Hustle

Et tu, fast food?

Written by The Hustle | Feb 8, 2024 8:00:00 AM

You used to be able to rely on scrounging up enough change for a value meal at a fast-food joint, but not in this economy.

Even Taco Bell and McDonald’s are feeling the heat as customers wince at rising costs.

What’s going on?

Yum Brands — parent company for Taco Bell, KFC, and Pizza Hut — reported flagging sales growth in Q4.

  • Sales at Taco Bell restaurants open one year or more grew 3%, compared to 11% in Q4 2022.
  • Pizza Hut sales dropped 4% in Q4, while KFC sales didn’t move.
  • Meanwhile, McDonald’s US sales grew 4.3%, compared to 8.1% in Q3.

The hash browns are too dang high

In Q3, McDonald’s CEO Chris Kempczinski said US customers were still lovin’ it despite 10% price hikes in 2023.

Now, he admits sales are slowing as eating at home becomes more affordable, especially among customers earning below $45k/year.

  • McDonald’s prices vary across the nation, but some customers have reported ~$3 hash browns and $18 Big Mac meals.
  • A single hash brown at my nearest McDonald’s, located in Pasadena, California, is $3.10 via DoorDash. Alternatively, a 5-pound bag of potatoes from Amazon Fresh is $3.59.

What now?

McDonald’s has promised price cuts and a return to its Dollar Menu.

Taco Bell is already offering new deals; The Washington Post noted they amount to about 4 pounds of food for ~$21, including a beefy burrito for $2.79.

But with everything increasing in price, from streaming services to housing, fast food may just be one of many things Americans ditch as they tighten their belts.

And now: Please enjoy Caleb Lennon, a Taco Bell employee with 473k+ TikTok followers, analyzing the best burritos for your buck.