Editor’s note: This is the third story in an occasional series on the causes and impact of inflation. Economic struggles and too-good-to-be-true value menus go hand in hand. Without the Great Recession, there would have been no $5 footlong from Subway.
That deal is long gone, but the latest economic hardship — this time from inflation — has spawned its generation of offers for customers looking to fill up cheap. From McDonald’s $5 Meal Deal to the $7 Luxe Cravings Box from Taco Bell, the fast-food value wars are on — a sure sign that customers are unable or unwilling to pay sit-down prices for assembly line eats. “If we see a drop in any sign of traffic, we expect these value meals, value deals will start showing up,” said Shubhranshu Singh, a professor at Johns Hopkins University who has studied fast food economics.
Mom-and-pop establishments in Western Pennsylvania don’t have the same luxury. They say they’re feeling the crunch from all sides, whether it’s higher wages for a dishwasher or more costly chicken wings. In an industry with notoriously slim margins — between 2% and 7%, one expert estimated — restaurateurs face little choice but to raise menu prices.
The Consumer Price Index, compiled by the Bureau of Labor Statistics to track price changes, shows that costs for food away from home rose 4% in August compared to the same time last year. Groceries prices rose less than 1% — though it’s worth noting this comes after peaking at 13.5% in Aug.