Fast food is too expensive for its core customer and not expensive enough for the customer it wants

Of the many wacky inventions introduced by Taco Bell over the years, maybe the most surreal entry isn’t one that you can douse in Diablo sauce. Known as the Name Your Price tool, a new feature on the chain’s app introduced this fall allows customers to preview different menu options that fit within a budget ranging anywhere from $5 to $25.

Of course, for the past several decades, fast food has been popular largely because its relative affordability took budgeting out of the equation for many. Even cash-strapped diners could usually scour their couch cushions or car consoles and find the loose change needed to assemble a respectable haul from a value menu. For a few bucks you could walk away with a McChicken or a Whopper Jr. and a small side of fries, or maybe some French toast sticks, assuming you were lucky enough to live near a Jack in the Box.   

In its own way, Taco Bell’s budgeting tool is a symbol of the end of these traditions. In a viral TikTok from January, one Taco Bell devotee produced an old receipt showing how two Beefy Five-Layer Burritos had set her back only $2.59 in 2012. “Can you even get anything from Taco Bell for $2.59 anymore?” she asked. Adjusting for inflation aside, the video — and its nearly 2,000 comments — are part of a larger lament among those who feel spurned by current fast-food prices. And it’s true that a diner would have to pay upwards of $5 for just one Beefy Five-Layer Burrito today, much less two.)

Though the double-digit prices of fast-food combo meals have generated outrage, the most visible evidence of the industry’s changing price points is the modern value menu. Born of the dollar menus of yore, they were once as simple as it gets: an abundance of options for a modicum of cash. 

What passes for fast-food value is no longer that simple. Like many other American institutions, the value proposition in fast food has become decentralized, shattered into a host of branded bundles, in-app deals, time-specific discounts, free add-ons, or redeemable loyalty points. How the industry squandered its hold on the American ethos of frugality isn’t just the cause of consumer rage; it’s the reversal of decades-long messaging and strategy that could cost the industry its relevance.

In the fast-food version of Proverbs, fries goeth before the fall. During the pandemic and its aftermath, the industry was flying high. After years of cultural shame, the drive-thru recaptured hearts and wallets, and takeaway had become so popular that even Michelin-starred restaurants were signing on to delivery apps. Not only were fast-food chains built to capitalize on the dining habits forged during lockdowns, but they had reclaimed their place in an increasingly rarified monoculture. Influencers and celebrities as beloved as BTS were endorsing their own customized meals. Two decades after documentaries like “Super Size Me” and books like “Fast Food Nation” sparked conversations over fast-food health concerns and industry practices, headlines were announcing that the industry had vanquished its haters. 

If fast-food considered itself invincible, its pricing reflected that. In March, fast-food prices had grown 33% beyond their prepandemic levels, outpacing the 26% price hikes at grocery stores, while corporate profits surged. (While some observers pointed to higher wages as a culprit, a study by the Institute for Research on Labor and Employment at the University of California, Berkeley, found that fast-food wage increases in California didn’t lead to major price hikes at restaurants or a decrease in employment levels.) But even as industry sales figures grew, juiced by higher-priced items, foot traffic began to decline as the sense that fast food was no longer the all-American bargain. 

Worse, in May a Lending Tree survey found that 78% of Americans had come to view fast food as a luxury, with 62% of respondents saying they eat fast food less because of the cost. 

Higher prices for what’s widely perceived to be a product of relative economy didn’t just pare down its customer base — it delivered opportunities for the industry’s competitors to step in. Beyond the traditionally more expensive fast-casual outfits like Chipotle or Cava, casual-dining chains that had been struggling for years also seized the opportunity, drawing spurned fast-foodies into their booths. 

A $13 meal at Chipotle or Chili’s suddenly seems like a good deal when one from McDonald’s is the same price. In April, Chili’s unveiled its Big Smasher campaign, which trained direct fire on fast food’s best-known entity: the Big Mac. For $11, a comparable price to a Big Mac meal in many markets, a diner could get three items including a burger marketed as having “twice the beef of a Big Mac and flavors fast-food lovers will recognize.” In response to complaints over fast-food prices on social media, the CEO of Brinker, Chili’s parent, said that high menu prices had practically dared them to “use fast food as a foil.” 

Both competition and customer fatigue eventually took its toll. Same-store sales — the gold standard of growth and operational health — had not only flattened for many fast-food chains but went into the red. Sales at Yum! Brands (of Taco Bell, Pizza Hut, and KFC fame) dropped 3% in the first quarter of 2024, and McDonald’s saw a 1% drop in same-stores sales between April and June. By the time summer arrived with its promises of fast-food-friendly road trips and adolescent boredom, the chains finally went on a discounting blitz. By most accounts, it was the first serious set of price cuts since before the pandemic. 

But where the bargains had once been straightforward, they now emerged as something more convoluted. McDonald’s, Wendy’s, and Burger King all released dueling $5 meals that, in a not-too-distant era, were roughly what combo meals used to cost. In many cases, though, the best values were folded into digital apps, where users tend to spend more per order (and surrender their valuable personal data).  

Each fast-food app is its own universe, typically with its own odd technicolor medley of reward points, app-exclusive items, notifications, and order-customization tools. It’s here where the deals live, though it takes the mental stamina of a Talmudic scholar to sift through them. Take the Popeyes app, which, like many of its peers, entices users with discounts specific to variables like the time of day, whether a meal is picked up or delivered, or meals packaged for larger groups.

Not every chain has changed its model so dramatically. In-N-Out Burger — which doesn’t deploy apps or discounting and whose wages are an industry high — announced a modest price increase earlier this year and calmly went on its way. Elsewhere, though, what remains of the traditional value menu no longer signals thrift. In several markets, for example, McDonald’s has come under fire for offering items on its $1 $2 $3 Dollar Menu that don’t actually fit within the price category.

Salvos in the latest value wars have yet to create meaningful territorial gains for the chains. Polling data from Morning Consult shows that consumer perception of fast food’s value barely budged over the summer, with diners still broadly thinking of fast food as a luxury or an indulgence. Foot traffic matched the sentiment and continued to lag behind. For an industry built on the image of simplicity and savings, fast food suddenly seems like neither.

Adam Chandler is a journalist based in New York and the author of Drive-Thru Dreams. His next book, 99% Perspiration, will be published in January 2025.