Big Macs aren't McDonald's real inflation story. Instead, look to the Cheeseburger

While the focus on inflation has centered on premium items like the Big Mac, it’s in the smaller items, with fewer deals available, where prices have increased most.
Burger prices
Image by Nico Heins

Want to know where McDonald’s has raised its prices the most? Check out the chain’s value menu.

Three years ago, we looked at Big Mac and Cheeseburger prices at McDonald’s locations in all 50 states. With all that data at our fingertips, and current concern about fast-food prices, we could not help but look at it again.

We expected to see substantial increases in the prices of the Big Mac. But we didn’t. Among the restaurants we examined then and now, the average price for a Big Mac increased just 16.4%. That’s well under the rate of inflation over that period, which in the fast-food world is close to twice that.

But then we looked at the Cheeseburger, and that’s where prices really changed. The average price for that product was $2.40 among the locations we looked at, or 55% higher than it was back in 2021, when the average price was $1.55.

At the time, the burger was included in the company’s $1 $2 $3 Dollar Menu, which kept the price down. But prices for items on that menu these days only vaguely resemble those numbers. There are four items on the menu after breakfast: The McChicken, McDouble, Small French Fries and 4-Piece Chicken McNuggets.

At one location in Beaverton, Oregon, prices for items on that menu ranged from $2.40 for the McNuggets to $3.55 for a McDouble. In suburban Minneapolis, that range was $2.59 to $3.49 for the same items.

In Rocky Mount, North Carolina, prices ranged from a $1.99 McChicken or the McNuggets to $3.29 for a small fries.

Indeed, in all the locations in which we checked on prices for that value menu, the lowest-priced item was $1.99.

That could suggest McDonald’s operators have worked to make their higher-priced items look like the better deal.

“My sense is that they brought their bottom-end pricing up in response to rising costs,” said Rich Shank, managing principal with Restaurant Business sister company Technomic. “The strategy behind that would likely be an attempt to make the more expensive items like a Big Mac more attractive.”

Restaurant chains have raised prices more aggressively in recent years because their own costs have soared. Wage rates are up 30% since just before the pandemic, and food costs took off in 2021 and 2022.

Other cost hikes, for construction or utilities or technology, have also eaten into profit margins. Insurance costs in states like Florida or California have also hit operators hard.

All this is after franchisees in the McDonald’s system pay royalties, marketing fees, rent—which can be 13% of their revenues or more depending on the location—as well as technology and other fees. They are also required to periodically remodel locations or upgrade equipment, which can require debt.

McDonald’s itself does not dictate prices. Franchisees, who need to generate a profit from their stores, control prices. Those prices can vary considerably depending on local costs for labor and rent.

Prices for Cheeseburgers are more than double in the highest-priced markets than they are in the lowest-priced markets, ranging from $1.59 in Augusta, Georgia to $3.49 in Honolulu and New York City.

For Big Macs, the variation is tighter, and that variation has actually narrowed over the past three years, with prices in the highest-priced markets 49% higher than the lowest-priced markets. That’s down from a nearly 70% variance three years ago.

Still, the highest-priced Big Macs are now $7.

Prices at McDonald’s have become a growing theme on social media, with mounting concern that inflation is putting what was once a cheap meal out of reach.

McDonald’s created the $1 $2 $3 Dollar Menu in 2018 as something of a successor to the traditional Dollar Menu that carried the brand through the Great Recession. But as inflation has hit, value has shifted largely to the company's mobile app, while operators have raised prices on the value menu. That has earned the ire of customers, who have been complaining on Reddit, TikTok and other forums on the lack of $1 items on that menu.  

@magicmansteve1#mcdonalds#dollarmenu#wtf#fyp#waitwhat#angrycustomer#lol♬ BTS x McD Ba Da Ba Ba Ba - McDonald’s

The price issue has not been lost on McDonald’s executives, who have been fretting on the loss of lower-income consumers, who have been eating at home more often. “That consumer is pressured,” CEO Chris Kempczinski said in February.

Several other chains, like Olive Garden, Wendy’s and Jack in the Box, have also lost low-income consumers that have struggled with inflation and rising menu prices. And, according to Technomic, people making $50,000 per year or less have cut back on their dining out in each of the past two years.

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