You’ll recall that the history-making $20 per hour minimum wage for Fast Food workers came into effect in California earlier this month. A new survey reveals how much Cali Fast Food menu prices jumped…
All Smiles: Now that she’s making a minimum $20 per hour in California…
It was inevitable. And everybody on both sides of the counter knew it. But the question remained: How much would Fast Food prices jump? Kalinowski Equity Research surveyed 25 locations of each major Fast Food chain and came up with some pretty conclusive numbers.
Not inconsequential
California menu price increases at the big-name chains have not been inconsequential. In fact, they range from 2 percent all the way up to 8 percent depending on the brand and the menu item you’re looking at…
Here’s the rundown:
Wendy’s – up 8 percent
Chipotle – up 7.5 Percent
Starbuck’s – up 7 percent
Taco Bell – up 3 percent
Burger King – up 2 percent
McDonald’s an anomaly
The industry’s traditional bellwether brand, McDonald’s has, some say mysteriously, held off from raising menu prices to help its operators and franchisees cope with the wage hike.
My intuition tells me McD’s is waiting to see what the opposition does, and then undercut them just enough to stay competitive. Burger King is generally considered the main competition to McD’s. And it’s only bumped its prices by an average 2 percent thus far. The Fast Food behemoths may be playing mind games with eachother…
My take
Of course, these numbers are early ones. They don’t rule out further increases in the future, as the chains gain real world experience with the new wage rate. And I fully expect some of the low-ball increases to jump significantly as the real-life consequences play out, over the next 30 to 60 days.
There’s also been talk of layoffs in the industry to control staff costs. And that plays hand-in-hand with the ongoing introduction of order/pay kiosks and the brutal, inexorable pressure the brands are putting on their fans to use digital and mobile ordering systems. That would allow management – theoretically – to get rid of all front of house staff.
So… The situation surrounding the minimum wage jump for Fast Food workers in California turns out to be a lot more complex than it appears on the surface. And it may take even more than the 1 to 2 months I predicted above to iron out all the wrinkles…
~ Maggie J.