Why Fast Food May Not Be a Value Option

Value Miss

With food costs way up since last year, some Americans are turning to fast food as a budget-friendly way to satisfy their appetites. But a recent survey by investment banking company Stifel (SF) found many consumers are disappointed by the value of these chains.

The study included a sampling of fast food restaurants across 20 cities. It asked over 1,000 diners to rate the value of the meals they purchased relative to cost. Here’s what they said.

Shake Shack Shakedown

Customers found Shake Shack (SHAK) provided the worst bang for your buck by far. On a scale in which higher numbers reflect lower value compared to cost, the restaurant snagged a score of 97. By contrast, McDonald’s (MCD) came in with a 4. Made-on-demand pizza chains MOD Pizza and Blaze Pizza also came in bottom five for value, with Chick-fil-A rounding out the list.

Meanwhile, Panera Bread came in as the most expensive overall, with the average cost of a complete meal resting at $14.76. Chipotle (CMG) was close behind, charging $14.34. McDonald’s once again distinguished itself as a low-cost leader, with an average meal cost of only $8.87.

App Offensive

Increased pricing isn’t the only way fast-food chains are adjusting to soaring food costs. Some chains are resorting to “shrinkflation” — offering smaller serving sizes in lieu of raising prices. For example, Burger King (QSR) recently dropped the count of its nuggets from ten pieces down to eight.

But it’s not all bad news for consumers. Reward programs are another way for these restaurants to maintain profit margins amid rising costs. The companies see these app-based programs as a means of constant advertising beamed right to customers’ devices, designed to drive loyalty and increase profit per diner. To do so, they often provide offers and discounts customized to your personal preferences — in other words, it’s also a win for you.

So, if you’re among those disillusioned with the value of fast food, don’t fret. Per usual, there’s an app for that.

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