Also, since Stein and Lorenz are accusing consumers of falling for a cherry-picked data point — the Idaho man’s order — it’s worth noting that prices in the broader category of food away from home have grown faster than inflation overall, increasing by 18 percent over that window. It shouldn’t be hard to understand why people are unhappy about that.
That’s not the most important point, though. Instead, it’s something a little more subtle: people aren’t just paying more, they’re spendingmore. Put another way, they’re not just paying more for the same basket of goods — how the government defines inflation — they’re also putting more and more expensive goods in their basket.
Fast food is a perfect example of how this works. McDonald’s revenues, for instance, are going gangbusters. Same-store sales are up 8.8 percent globally and 8.1 percent in the United States. What’s driving the increase?
The company’s U.S. same-store sales increased 8.1%, fueled by strategic price increases. Executives said they expect pricing will be up about 10% for 2023, but third-quarter menu prices came down slightly. The chain also credited its marketing campaigns and digital and delivery orders for its sales growth.
OK, so we have “strategic price increases”, “marketing campaigns” and “digital and delivery orders”. Let’s think through each of these by means of a stylized example of a fast-food menu. Here is my impression of what ordering fast food looks like in 2023 as compared with 2020: