As humans lean more health conscious these days, snack brands and high-preservative grocery store goodies — like peanut butter — have struggled.
On the flip, the past couple of years have, surprisingly, proved to be cash cows for fast food chains.
According to Goldman analysts, OG drive-thru brands like McDonald’s and Taco Bell — and pricey fast-casual ‘straunts like Chipotle and Shake Shack — have helped the fast food industry outperform the S&P by 27% over the last 12 months.
Chipotle’s stock is on track to hit $1k per share, and Mickey D’s has seen its stock break records 18 times this year alone.
So what’s the deal?
Some of the credit is due to fast food companies investing in digital engagement — but there’s also another (more interesting) factor at play.
The fast-food industry’s surprising boost primarily comes from the increased pay of low-wage workers.
That’s right, we have ourselves another wacky economic indicator
Goldman’s research team estimates 70% of the industry’s growth over the past 5 years can be linked to rising wages and flourishing third-party apps like Uber Eats.
You would think rising wages would hurt the “cheap-food” industry (don’t hate, Panda Express is choice) but, as gas prices stay steady, the rising paychecks of minimum-wage workers is leading to more cash dropped at the drive-thru.