Rising prices turn fast food into a luxury for many Americans

Once considered a quick and affordable dining option, fast food is now being seen as an occasional indulgence by a majority of Americans, thanks to inflation-driven price hikes.

A recent survey by LendingTree found that 78% of Americans think fast food is now a luxury, and 62% are eating it less because it's more expensive.

The survey, with insights from over 2,000 American consumers, reveals how inflation has affected spending habits and changed how people view fast food.

Those who are cutting back the most are people with lower incomes, parents of young kids, Gen Xers (aged 18 to 27), and women.

Inflation is taking a huge bite out of takeout orders

Fast food has long been a staple for busy American families, providing a quick and budget-friendly meal option for 75% of respondents at least once a week.

But rising prices mean that a Friday night pizza party is now more likely to strain the budget rather than help extend it.

The latest consumer price index (CPI) report shows that prices for fast-food menu items at places like Taco Bell and Chick-Fil-A have shot up by almost 28% from 2019 to 2023.

That's much higher than the overall CPI increase of about 19%.

In fact, some fast-food chains have already doubled their prices in the last 10 years alone, with McDonald's 100% mark-up leading the charge.

For families relying on cheaper takeout food to help make ends meet, the difference hits hard.

Those earning less than $30,000 a year are feeling the pinch the most, as the majority (69%) have cut back on fast food.

Perhaps most surprisingly, the strain is also evident among higher earners (over $100,000 a year), where 52% have reported cutting back.

Unpleasant bill surprises

According to the survey, at least 65% of Americans have experienced "sticker shock" from the unexpected size of their fast-food bills in the past six months.

That's especially true among parents of young children.

What's more, almost half of those who received tip requests at fast-food places (around 44% of respondents) have refused, showing that consumers are increasingly tapping out of these extra expenses.

As a result, three-quarters believe that fast food isn't a cheaper option anymore, with 56% now opting to cook at home instead.

The future of fast food

Price increases haven't stopped some fast-food spots from being held in high esteem.

Chick-fil-A, Starbucks, and Chipotle top the list, with many using mobile apps to unlock discounts and manage their fast-food spending.

The survey found that 46% of respondents use loyalty apps that offer points, birthday discounts, and other perks.

To help combat rising prices, chains like Wendy's, McDonald's, Taco Bell and Burger King are also re-introducing value meal options and ‘limited time’ promotions to get consumers back in their restaurants.

However, fast-food franchise owners are also struggling with the impact of inflation and see the value offerings as “break even” options at best.