McDonald's, Chipotle to raise menu prices in Cali as fast-food wages rise to $20 | Hacker News Reader

McDonald's, Chipotle to raise menu prices in Cali as fast-food wages rise to $20

cnbc.com

28 pointslando231936 comments

Fast food doesn't make sense anymore. Inflation has hit other food options too, but fast food has lost the discount relative to better food that's supposed to be part of its fundamental contract.

At least where I am it is still cheaper than alternatives because wages at those options have gone up as well. The exception is family-run stores where wages are kept low by roping in unpaid labour from family or outright exploiting immigrant labour who don't understand labour law or have the language skills to make their case for it.

i'm conflicted, for people that don't eat meat chipotle and taco bell can be pretty nice.

At McDonalds combo meal deals target price insensitive customers. Here in San Francisco you can get 20 Chicken McNuggets for $5, which is an astounding price/calorie deal, possibly even deliberate charity to earn political goodwill. The McDouble[1] is also a good value, but not nearly as good as the 20-piece McNuggets.

[1] Or maybe the Double Cheeseburger. I forget which is the better deal.

When I cycled from Los Angeles to the Mexican border last year, I was surprised by 1) how few McDonalds there seemed to be compared to other chains (McDs used to be omnipresent, at least in other parts of the USA), and 2) how expensive food at any of the fast food chains around was: KFC, Carl’s Jr, etc. was inevitably over $12 for a basic meal. Even rudimentary Mexican fast-food places felt like they were getting pricey. So, that San Francisco deal on nuggets that you describe is amazing, but I wonder how many Californians can actually take advantage of it where they are.

> So, that San Francisco deal on nuggets that you describe is amazing, but I wonder how many Californians can actually take advantage of it where they are.

While the price varies I think the 20-piece is usually one of the better deals at any franchise, though maybe not always the best one. The price hasn't changed much, if at all, while more popular menu items have significantly inflated in price. Also, now that I think about it, some of the less popular breakfast sandwiches are often the better deals on the menu, though that's only for breakfast.

I agree fast food prices have inflated significantly across the board, both chain and mom-and-pop, and inflated more than groceries. But I think McDonalds is more conscientious than most about preserving some strong value items, presumably partly because of the communities they're expected to serve (a quid pro quo for their ubiquity?). The low-priced options have become more spartan, but less spartan than other fast food joints.

Here in the UK, I've that basic hamburgers (£1.59) or cheeseburgers (£1.79) offer the best value, or indeed the box of 20 chicken McNuggets (£6.99).

They definitely try to hide those basic burgers in favour of 'fancier' and much more expensive ones. Even just a Big Mac is £4.79 and chicken burgers are £5+.

Oh just noticed these are Deliveroo prices. In store it is cheaper...

The McDonald's app has incredible deals. You can only use 1 deal per app, but we have each person make separate orders on their own app and charge to the same card. At the drive through, you can read out as many order codes as you have.

E.g. $1 breakfast sandwich (normal price about $4.50 here). Also BOGO on various items. If our local sports team wins, there is usually a good deal offered that day.

Considering you don't tip, it's by far the cheapest way we eat out, and it's probably cheaper than a lot of stuff we eat at home.

McDonald's used to be our "I don't feel like cooking, what's a cheap and fast option?" Bearing in mind that we live about 10 miles outside town and McDonald's is the first business as you get into town, I'd often get takeout from there. But last time I noticed that a McD's meal for 3 was within $10 of a restaurant that we like and that's only another half mile away with much better food. And since I place the order before driving there, the food's ready just as I arrive, so time-wise they end up being the same.

McDonald's has the benefit of being open until midnight whereas my local restaurant closes at 7PM weekdays, but that's about it.

During the year I've cut back on eating out due to the very high prices being charged at restaurants, even fast food restaurants. The prices have escalated dramatically since the pandemic, yet my salary hasn't gone up to match. This inflationary environment makes me very frustrated and I feel like I can't get ahead, but I digress. Anyway, because of ridiculously high prices for eating out these days, I largely don't eat out except for social events. Even when I'm away from home, I go to grocery stores such as Whole Foods and Safeway and purchase grab-and-go foods. It's cheaper, healthier, and tastier for me.

I think there will be a day of reckoning coming for the fast food industry where they'll price themselves out of existence. If a "techie" is complaining about $11 fast food combo meals, then imagine who are low-income who can't afford these prices at all. Companies like McDonald's and Taco Bell built their empires on cheap food, but nowadays the food isn't cheap anymore, yet the quality isn't there. Yes, I understand that the fast food industry itself has been dealing with increased costs for food, real estate, utilities, and labor. But I feel something has to give.

Their big margin eater for $6 dollar burgers is paying $20 to employees?

Typical restaurants have a labor cost of about 30% of gross revenue and is one of the larger costs in food service operations (along with rent and food costs).

Typical restaurants. This is fast food though - notoriousy underpaying, McDonalds being owner of much of their real estate, everything optimized all the way, everything mass produced at the lowest cost. I'm not saying this means their labor's costs percentage is lower (it can be higher than a typical restaurant). I'm saying they have way better margins:

"McDonald's net profit margin as of June 30, 2023 is 33.06%".

As for the typical restaurant?

"The range for restaurant profit margins typically spans anywhere from 0 – 15 percent, but the average restaurant profit margin usually falls between 3 – 5 percent".

So they can cry me a river...

In-n-Out has always been paying higher wages and at this point their burgers are at or cheaper than other fast food for a better product.

Of course they are private though and have a very simple menu which must account for some savings.

Are there consistently available regional inflation metrics?

Replace them all with machines.

$30k a machine over a lazy $40k FTE is an easy call.

What's terrible is the hard working kid who will take $15/hr is barred from working.

Kudos, So much truth here

Fast food workers are lazy? Is that the truth here?

Compared to a machine, I afraid everyone is a lazy one.

Increasing wage floors for this kind of work will increase the speed at which automation will be adopted by companies

My McDonald's employment ended more than 50 years ago--not too soon for me, and probably, come to that, not too soon for them. I was not lazy, nor were my co-workers. I was not particularly efficient, but it was the third W-2 job I ever held.

I did hold one more fast food job after that, and can tell you that it was not one for the lazy.

(I will add that the job then paid minimum wage--$1.60/hour. That summer, $1.60 would buy 5 gallons of gasoline.)

Some are - and they would be the first to be replaced.

Why are they lazy

People have bought into the idea that certain jobs are just bad and therefore only bad workers take them. They then like to imagine that the jobs are OK, as long as they are done by children who will go on to better things.

Never mind the fact that these people rely on those workers to feed them even during the school day (and the jobs are usually bad because one is forced to deal with people who look down on you).

It’s a round about way to counteract the obvious question that comes after these kinds of articles (Isn’t even $20/hr only $40k/year full-time?)

No job or position is bad if done well.

Fast food workers are low skill, low entry. Why should they pay beyond the value they bring?

As for "lazy" - that has been my recent experience. I rarely visit such establishments so perhaps my experiences are my own.

It's just a thing you say to elevate yourself over a hypothetical other because that's something you have a need to do. It's just words to make someone feel good, I wouldn't take it literally.

I really don’t understand the drama and slow motion trainwreck about machines doing fast food. It is so obvious and I cant imagine why a new entrant hasn’t just done it and pushed the market forward.

Please tell me some ghost kitchen on Doordash is already doing this and nobody knows, because the current reality is ridiculous.

It's been discussed here before. The reality is that a) most fast-food chains have already automated as much as they can before b) the robots that can do the rest of the work are complicated, are single points of failure, they're single-tasked, and need more maintenance and food-safety cleaning than a human.

If a human fails or doesn't show up for work, it can be quickly replaced. Not so for the robot.

They have FTEs? I thought they avoided having full time employees in pretty much every jurisdiction.

I was the kid making $9 CAD at McDonald’s in the early 2010s; it’s certainly interesting to me the same job is paid almost 3x in California. In my experience, while maybe 60% of the tasks at McDonald’s are well optimized for machines, lots still are not and will be a long time before they are. Drive-thru immediately comes to mind - our store was frequently moving 100+ cars an hour, I can’t imagine machines being able to hit that frequency any time soon.

100% automation is certainly the Holy Grail but too much attention is focused on it. Most fast-food operations could be improved with more investment in automation, but they'll need to pick and choose which tasks make sense to automate and which ones do not. A system that allows two employees to do the work that now would take six employees? That's a big win for the company and customers but a loss for the four people who won't be able to find a job.

Also want to be careful to not get into a McDonald's ice cream machine type situation. Whatever McDonald's reason for getting into that pit, be it squeezing franchisees or having been out maneuvered by the machine manufacturer, adding more machines creates more opportunities for that type of failure.

Yes, the thing that people forget is that Automation Breaks. When a McBurger machine breaks, that could be 50% of the store's revenue lost until a technician shows up to fix it. And that technician won't be cheap.

McDonald's is hyperoptimized to the point that I'm positive they've done the math and decided that humans are cheaper.

That kid who works what hours exactly?

I worked 5pm-10pm most nights for minimum wage.

I did this as a kid too. It was one of the worst ideas ever. So much time lost that I could have been developing and learning to be a person and it was traded for chump change.

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