Financing

Is Chili's cheaper than McDonald's? It's complicated

Fast-food price increases have made price points between the two brands closer than ever. But there is a better comparison for the casual-dining concept.
Chili's
Chili's isn't cheaper than McDonald's, but it's cheaper than some fast-casual chains. | Photo by Jonathan Maze

Menu price inflation at fast-food restaurants has become a popular topic on TikTok and other social media platforms.

One recent such viral moment came from a pair of TikTok users who claimed that Chili’s is now cheaper than McDonald’s. Their argument: Chili’s “3-and-Me” deal, offering an entrée, drink and an appetizer for a single price, has lowered the price so much that the brand is cheaper than the fast-food giant.

@easontrbojevic#fyp#boomer#woke#lgbt#taylorswift#letthemeatcereal#taylorandtravis#eattherich♬ original sound - Eason Trbojevic

We were skeptical. So, we set about the find out for ourselves. The short answer? No, Chili’s is not cheaper than McDonald’s. But it’s closer than maybe it should be. And Chili’s is now comparable with many of its fast-casual rivals.

To understand the cost of a night at Chili’s versus one at McDonald’s, I looked at the cost of taking my wife and youngest son to the restaurants. The teenager had a Double Big Mouth Burger at Chili’s and the Double Quarter Pounder at McDonald’s. My wife and I got regular-sized burgers and Quarter Pounders at McDonald’s.

The burgers themselves are not necessarily comparable. Chili’s burgers are larger than those at McDonald’s. At the same time, many of the appetizers Chili’s offers, such as chips and salsa, are not available at McDonald’s. To replicate that, we made a personal sacrifice and ordered a regular Shamrock Shake.

The base price at Chili’s for those three meals under the 3-and-Me deal is $39. At McDonald’s, our order came to $36.

Yet we could have saved about $7 on the McDonald’s meal using the app, using a 20% off coupon, which would have made that $27. That’s a fair comparison, given that the Chili’s meal was on a deal, too, and at a substantial discount.

More to the point, McDonald’s has several options for eating cheaper, either through the app or on the regular menu.

What’s more, most orders at Chili’s are inside, where customers typically leave a tip. Tips are less voluntary at a casual dining concept and are part of the overall cost of the visit.

A far more comparable visit is Five Guys, where a trio of the chain’s cheeseburgers, one of them a bacon cheeseburger, plus a large fries and three drinks cost $49. And Five Guys asks customers to leave a tip, ranging from 5% to 20%, and doesn’t have the deal options other brands do.

@jonathandmaze The latest in my increasingly misnamed #fastfoodminute Is @Chili’s Grill & Bar really cheaper than @McDonald’s? #inflation#fastfood#prices#ffm#fyp#business#menu♬ original sound - Fast Foodie

Still, the comparison illustrates the deep concern about fast-food prices among consumers.

Limited-service prices are up 29.5% since February 2020. Full-service prices are up 24% over that same period. That’s a notable difference.

The concern about prices has led to several viral moments, such as Wendy’s “dynamic pricing” comments, McDonald’s $18 Big Mac meal and periodic attention placed on Five Guys prices.

Lower-income consumers are dining out less often as a result of the inflation. “Consumers are working through dealing with all that inflation that’s hitting their pocketbook across all areas of spend,” McDonald’s CFO Ian Borden told analysts at the USB Global Consumer and Retail Conference last week, according to a transcript on the financial services site AlphaSense.

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