Fast food has long been viewed as a cheap and convenient option for busy Americans, with prices that make consumers willing to overlook incidents such as E. Coli outbreaks at chains including Jack in the Box, Chipotle, and McDonald’s, and past concerns over “mystery meat” at Taco Bell.

In the wake of rising inflation, however, long-standing perceptions of these chains as the cheapest way to enjoy a meal may now be in trouble. A recent study conducted by LendingTree found that 78% of Americans view fast food as a luxury, with 62% of Americans saying they are eating less fast food due to the rising prices.

This perception is not grounded in delusion: According to a separate study conducted by Finance Buzz, the average fast-food menu prices rose between 39% and 100% over the past 10 years, all of which are increases that have outpaced the 31% inflation during the same time period. 

Health of the Economy

Ideas about fast-food prices are indicative of how Americans view the health of the economy as a whole. While inflation has slowed down, prices are still rising, making people’s day-to-day financial situations more difficult, says Matt Schulz, LendingTree’s chief credit analyst. As a result, he says, people remain troubled about the state of the economy. 

“I think it is a perfect example of why [there is] a disconnect between people’s views of the economy and economic data,” Schulz says. “Things are much more expensive than they used to be, and it is not just big things. It is things we buy every day, like milk and gas and Happy Meals . . . and when the things we buy regularly are a lot more expensive than they used to be, no one should be surprised that people’s view of the economy is not great.”

The rising prices of fast food are particularly jarring due to its history of cheap convenience. 

“For generations, fast food has been a quick, relatively inexpensive way for busy families to have a quick meal . . . and a lot of people are finding that that is changing,” Schulz says. 

Cheaper alternatives to fast food exist

To keep up with these changes, consumers are pivoting, with many eating at home to save money and looking for other options, Schulz says. Microwavable meals from the grocery store have emerged as one popular option, he says, severing as a middle ground between fast food and cooking from scratch. 

Even sit-down restaurants are seen as an alternative, with offers such as Chili’s 3 for Me deal ($10.99), which includes a beverage, starter, burger, and fries. For comparison, a McDonald’s Big Mac Meal costs $13.89 on DoorDash in New York, before any additional fees and includes the burger, fries, and drink. 

“If [customers] perceive that they can go to a sit-down restaurant and have somebody serve them for the same price, instead of going through the drive through . . . a lot of people are certainly going to opt for that sit-down choice,” Schulz says. 

Let’s make a deal

Fast-food chains across the industry are scrambling to release deals that will lure consumers back into stores. 

McDonald’s recently announced plans to release a $5 value meal at the end of June. Burger King immediately followed with plans of its own to release a $5 meal deal, which will be released before the McDonald’s campaign. Wendy’s, for its part, dropped a breakfast combo for $3 last week; and for National Hamburger Day on Tuesday, chains offered a variety of discounts and BOGO deals. 

These deals are probably a smart move as 72% of Americans surveyed by LendingTree admit that they’d be more likely to eat fast food at off-hours if there was a discount.

While some chains may lean further into discounts, others may lean more into the service aspect and embrace being a bit higher in the end, Schulz says. 

“Ultimately, it is about providing value,” he continues. “Sometimes, that is lowering prices or giving a little bit more for a higher price. Sometimes, that is more service or a loyalty program . . . but people will pay more if they feel like they are getting value for what they are paying for.” 

In the interim, Schulz suggests that consumers implement cost-saving tips, such as leveraging fast-food mobile apps and their deals, ordering just one item instead of the whole combo meal, and making sure to include fast food in their budget, not just sit-down restaurants.