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Why fast food is cheap. Really cheap.

Lizzie O'Leary Mar 4, 2016
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Karen Bleier/AFP via Getty Images

Why fast food is cheap. Really cheap.

Lizzie O'Leary Mar 4, 2016
Karen Bleier/AFP via Getty Images
HTML EMBED:
COPY

Maybe you bought fast food recently, and maybe you noticed it was cheap, like, really cheap. The reasons for that are both macroeconomic, and because consumers are adapting to big changes in the restaurant business.

Venessa Wong, deputy business editor at Buzzfeed, recently wrote about the prevalence of fast food deals and came on the show to discuss why prices are plummeting:

Fast food companies have always targeted lower-income consumers. What’s different now is that these customers are expected to benefit from lower gas prices, falling unemployment, and rising minimum wages, according to research by investment bank Cowen and Company. And as low-income consumers find more money in their wallets, commodity prices are no longer shooting upward as they did in recent years.

As “forecasts for key restaurant commodities including beef, chicken, pork, dairy and wheat are in-line to below long term averages,” restaurants are particularly eager now to take advantage of the lower costs to boost traffic to stores, said Cowen’s report.

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