Have they tried making the food actually worth the prices necessary to be profitable? We eat less McDonald's and other franchise fast food because the prices have risen so much that it's no longer...
Have they tried making the food actually worth the prices necessary to be profitable?
We eat less McDonald's and other franchise fast food because the prices have risen so much that it's no longer the cheap option. Plenty of fast-casual places offer the same amount of food for a similar price, but at a much higher quality.
At these prices, McDonald's is starting to compete with local burger joints that make way better burgers.
I suspect that the real money sink are franchisee fees and advertising. Small local places don't buy superbowl ads and don't owe a chunk of their monthly profit to some real estate company based in Chicago.
I don't really buy fast food, but the only time I will is on a road trip. For that I might still go to McD's and get a McFlurry or something just for the sake of having a McFlurry, even though I...
I don't really buy fast food, but the only time I will is on a road trip. For that I might still go to McD's and get a McFlurry or something just for the sake of having a McFlurry, even though I can tell the prices are out of control. I can't imagine them actually having regulars that accept the prices. Pretty much any other option is better.
Very true. Last time I had to grab one because I was seeing a friend in hospital and I deeply regretted it. Not cheap, with terrible dry bread and a dried up excuse for a patty. No ketchup unless...
Pretty much any other option is better.
Very true. Last time I had to grab one because I was seeing a friend in hospital and I deeply regretted it. Not cheap, with terrible dry bread and a dried up excuse for a patty. No ketchup unless you notice that they haven't dropped any sachets in the bag and ask, then they begrudgingly give you 1, maybe 2 packets, I had to ask for more... Just a horrible meal and an unpleasant consumer experience. I'll go hungry next time or be more mindful to make and pack some sandwiches to take.
Ha! Last time I got some fries and they didn't give me any ketchup. I looked around and realized you can't get any at a self-serve location (no pump, no packets). So I went to the counter. They...
Ha! Last time I got some fries and they didn't give me any ketchup. I looked around and realized you can't get any at a self-serve location (no pump, no packets). So I went to the counter. They ignored me for a minute or two, looking right at me and going off to do other stuff. Then I realized that under the counter they had the packets so I grabbed them for myself. Why all the hassle for a few cents of ketchup?
Everything’s behind the counter now. I’m not a frequent fast-food consumer but when I emerged from pandemic hibernation I was shocked to see how McDonald’s (et al.) dining rooms had changed during...
Everything’s behind the counter now. I’m not a frequent fast-food consumer but when I emerged from pandemic hibernation I was shocked to see how McDonald’s (et al.) dining rooms had changed during covid. It’s an eerie ghost town inside. There aren’t any cash registers up front, having been replaced with self-serve kiosks. All of the employees are in the back behind a wall or visibly ignoring everything except the drive-thru window, which is constantly busier than I remember seeing in the before times. If anyone else enters the dining room, it’s usually an Uber Eats driver, who grabs a bag waiting for them on a rack by the door and immediately departs.
There are no napkins, straws, forks, condiments, or water cups set out. Good luck getting anyone’s attention behind the counter, if you’re eating in the restaurant you don’t exist to them. The restroom doors are locked and no one will give you the code. Did I mention how terrible the self-serve kiosks are? Finding what you’re looking for and correctly inputting it on the touch screen takes ages now. It took me about five minutes just to order dinner for my family on one, when the whole order could’ve been spoken to a human cashier and paid for in seconds.
Maybe things were already moving in this direction before covid and I just didn’t go often enough to notice, but from my POV every major fast food chain is suddenly like this now and it’s downright dystopian. It parallels the way my local Target and grocery stores now have half of their inventory inside locked cases, with prominent security cameras with attached monitors and security guards posted at the door. Increasingly I feel as a customer that I am viewed with suspicion by default, that prices are skyrocketing at the same time as customer service and product quality are at all-time lows. And concurrently, costs are being cut in visible, hostile ways and the workforce is also being reduced to threadbare levels. All of this happening at once feels like the companies are desperate, like they’re trying not just one strategy but every trick in the book to turn a profit and they don’t have any more levers to pull. It feels like panic.
I find ordering food from a kiosk the most depressing thing ever. Especially if there is actually someone behind the counter but they redirect you to the kiosk.
I find ordering food from a kiosk the most depressing thing ever. Especially if there is actually someone behind the counter but they redirect you to the kiosk.
Really? I much prefer ordering from kiosk. You can much more easily see what the available options are on the menu, as well as customization options. If you go to Japan or Taiwan even at most “sit...
Really? I much prefer ordering from kiosk. You can much more easily see what the available options are on the menu, as well as customization options. If you go to Japan or Taiwan even at most “sit down” restaurants you order via an iPad or other tablet. I think it works much better.
If it's well engineered, then yes I can see how it's more convenient. But for me it's about the humane aspect of it. Feels like we're literally replacing people with kiosks, and it's again...
If it's well engineered, then yes I can see how it's more convenient. But for me it's about the humane aspect of it. Feels like we're literally replacing people with kiosks, and it's again decreasing the interaction we have with eachother. And covid thought us that, after all, from time to time we do need some of that right ;-)?
I guess the hassle is the point, right? You're shameless enough to reach over, I'm irritating enough to ask on principle, but if I hadn't been grabbing it for my partner, I'd probably have just...
I guess the hassle is the point, right? You're shameless enough to reach over, I'm irritating enough to ask on principle, but if I hadn't been grabbing it for my partner, I'd probably have just not bothered and eaten a dry burger. I'd be surprised if they were paying more than 5 cents per sachet, but I'm sure some MBA in Chicago got a bonus for cutting down on ketchup spending at a fast food restaurant.
Saw a "conspiracy" theory somewhere that what they are doing is to increase prices astronomically, say from $10 to $20 for a menu, and then lower the prices to $15 after everyone's gotten used to...
Saw a "conspiracy" theory somewhere that what they are doing is to increase prices astronomically, say from $10 to $20 for a menu, and then lower the prices to $15 after everyone's gotten used to the high prices. Because then they will be able to say that they are back to being super duper cheap.
That implies a level of understanding of the market from McDonald's that is unrealistic. I think the process is more like a slime mold (lots of independent actors - franchisees) performing...
That implies a level of understanding of the market from McDonald's that is unrealistic. I think the process is more like a slime mold (lots of independent actors - franchisees) performing gradient descent (tweak one variable, see if profit improves). The big macro events of the world change the actual gradients which change the results of the descent process.
How dare they bring in California minimum wage increase in the article, when the rest of the country still saw declines in customer visits and insane price hikes?! There's also marketing fees...
How dare they bring in California minimum wage increase in the article, when the rest of the country still saw declines in customer visits and insane price hikes?!
Margins are smaller for franchisees to begin with because of royalties that are paid monthly to corporate headquarters, often in the range of four to five percent.
There's also marketing fees charged on top of royalties, and don't forget the initial start up costs to get the restaurant looking a certain franchise way. Labour costs is a lot, sure, but it's not the only or even biggest reason why franchisees are having a hard time. Even regular restaurants are having a hard time because the cost of basic food ingredients, utilities, insurance....everything has gone insane.
Something else that I'm not seeing anybody mentioning: for some strange reason, everyone seems to have forgotten that we just had a global pandemic. Essential workers and food services were where...
Something else that I'm not seeing anybody mentioning: for some strange reason, everyone seems to have forgotten that we just had a global pandemic. Essential workers and food services were where the highest transmission rates hit: people who worked minimum wage in order to stay afloat and could not afford to miss a single day of work. Companies are complaining about the price hikes in labor costs and pointing the finger at regulation, when in reality they've been forced to raise wages because a not insignificant portion of the minimum wage workforce died. And now they're passing their terrible pandemic-era decisions down to consumers. At this point it's not even surprising anymore, but frankly speaking: how is it possible that everyone's managed to collectively forget so quickly? And now bending over backwards to headcanon corporate justifications?
I was watching a Red Letter Media youtube video yesterday on the death of cinemas, and they also mentioned how everyone has forgotten about covid now. They were saying it in the context that...
I was watching a Red Letter Media youtube video yesterday on the death of cinemas, and they also mentioned how everyone has forgotten about covid now. They were saying it in the context that cinemas can't blame "fear of being with lots of people in a closed space" as a reason for movie-goer numbers to be down. Big concerts are packed with people again, conventions are at full strength, travel is back to normal. The pandemic has been almost erased from our collective memory. Nobody really wants to remember it, I think that's part of why.
Essential works got screwed everywhere. Almost right after the pandemic nurses and other medical staff were on strike in parts of the UK and Europe because, despite being "essential", their pay was crap, their hours ridiculous, and their working conditions abusive. Food service is understaffed everywhere too because, surprise, the pay is bad so nobody wants to do it. Dealing with the public sucks as well, people are ruder than ever.
When the pandemic was first heating up, I remember reading about the weird historical silence that followed the previous pandemic, the Spanish Flu outbreak of 1918. I wish I had the link to the...
When the pandemic was first heating up, I remember reading about the weird historical silence that followed the previous pandemic, the Spanish Flu outbreak of 1918. I wish I had the link to the article, I think it was posted on Tildes. The gist of it was that after the world emerged from a massive plague with a staggering death toll, people just… never talked about it. And the article speculated about how that could happen, if it was some sort of collective embarrassment or just a desire to forget or something.
And now here we are just a handful of years past our own pandemic and the same thing is happening. The silence is deafening. Personally, I was profoundly traumatized by the experience (and I didn’t even lose anyone to the disease). I was an introvert who had worked hard to cultivate a social life, and lockdown and the move to remote work shattered my relationships and reset my progress to zero. I’ll be trying to reclaim that lost ground for years.
The experience of living through the pandemic broke me in ways that are hard to articulate. I perceive that it broke a lot of things that remain broken today, like the weird atmosphere of people just plain being brazen dicks in public… but again it’s hard to articulate and anecdotal, and people look at me funny if I suggest it’s pandemic-related. The world kinda sucks now, in new ways that it didn’t suck in back in 2019. Of course the pandemic was a factor. It happened. It affected everyone. Its effects continue to ripple forward through time.
I got sick with covid again a couple weeks ago. I felt strange even acknowledging that, that it wasn’t just a generic “cold.” I took an antigen test, I was covid positive. But nobody I know even uses the word covid anymore, even if that’s precisely what it is. I feel silly for bothering with the covid test. Even the CDC recommendations now lump covid together with colds and flus under a generic “respiratory infection” header that doesn’t mention testing in its guidance. Granted, the strains circulating now are way milder and generally regarding it like other sniffles is appropriate, but I feel… weird… not even naming it. Why are people so reluctant to talk about it, or think about it, or admit that it’s the cause (or at least a factor) behind so much of the crap happening today?
What is an example of somewhere where you'd expect to see reference to COVID and don't? I don't think it's "trauma" or anything, I still see COVID referred to when it's obvious, or more often as a...
What is an example of somewhere where you'd expect to see reference to COVID and don't? I don't think it's "trauma" or anything, I still see COVID referred to when it's obvious, or more often as a punchline, but it just... does come up that much?
I don't think it was all that traumatic for most people, so now that you don't think about it anymore, it just slips the mind.
I disagree. Labor is one of the largest expenses in the restaurant industry. Aside from California's minimum wage laws, the actual federal minimum wage is pretty much moot in the rest of the...
Labour costs is a lot, sure, but it's not the only or even biggest reason why franchisees are having a hard time.
I disagree. Labor is one of the largest expenses in the restaurant industry. Aside from California's minimum wage laws, the actual federal minimum wage is pretty much moot in the rest of the country. Fast food places are now having to pay $12-20/hour for workers even though minimum wage is still $7 or whatever.
And those labor costs don't just affect the restaurant directly. Every single link in the food supply chain from farming, to food processing, to transportation and logistics has incurred similar cost increases. The restaurant is at the end of the food chain and has also had to incur the cost increases from everything upstream from it.
To be clear, corporate profits (or greed if you want to call it that) do factor into this. But labor is, and continues to be one of the largest expenses for a restaurant.
I agree with you that it's one of the largest. But is it in fact the single largest? And I mean, you can't also factor in wages every step of the way as reason for why either, that doesn't seem...
Labor is one of the largest expenses in the restaurant industry.
I agree with you that it's one of the largest. But is it in fact the single largest? And I mean, you can't also factor in wages every step of the way as reason for why either, that doesn't seem fair? We wouldn't look at "oil prices have risen" and factor that in from the plastics used at the farm to the gas it takes to get food in....right?
I could randomly search, and I dont want to push the burden back onto you, but if there are easy and good known sources, I would like to see some actual break down of costs to run a franchise restaurant. This random site says 25% to 35% of total revenue). So a huge chunk, agreed, but they've got to pay 75-65% for other stuff even if they have zero workers and just robots right? Does that explain why price of fast food has risen higher than wage increase?
And then, what is the alternative? Canada is terrible for just pushing non-living wage work onto "temporary foreign workers". But if these places can't survive without exploiting TFW, maybe they shouldn't exist.
That link that you sent does seem to indicate that labor could indeed be the largest cost by percentage. It might depend on the restaurant. It says 25-35% of total revenue for labor, and that the...
But is it in fact the single largest?
That link that you sent does seem to indicate that labor could indeed be the largest cost by percentage. It might depend on the restaurant. It says 25-35% of total revenue for labor, and that the actual food and beverage cost is another 28-35%.
Does that explain why price of fast food has risen higher than wage increase?
I'd say that the price of fast food has risen higher than average national wage increases, but not higher than the fast food industry's wage increases. Fast food was commonly paying minimum wage previously. They're now having to pay 200-300% of minimum wage. So because fast food (and its associated industry) has experienced higher-than-average wage increases, it's expected for it to also have higher-than-average price increases. It's not the only reason for the increase (McDonalds corp has had a healthy increase in its profit margins over the years), but it does account for a lot of it.
But if these places can't survive without exploiting TFW, maybe they shouldn't exist.
Maybe they shouldn't, and maybe they won't going forward. The only reason McDonalds exists is because tens of millions of people pay for it every single day.
It pains me that your comment is the first place I’m seeing any mention of corporate greed as an explanation for all the price hikes whereas the article and even some of these comments directly...
It pains me that your comment is the first place I’m seeing any mention of corporate greed as an explanation for all the price hikes whereas the article and even some of these comments directly reference labor costs and vague upstream cost increases.
Chipotle used the labor excuse too and yet their profits were up almost 200% from last year and their CEO got a $30 million bonus. McDonald’s gross profit in 2023 was almost $15 billion.
Greed wasn't the change. All players in a market economy are maximally greed. When companies didn't raise prices in 2018: that was due to greed. When companies did raise prices in 2021: that was...
Greed wasn't the change. All players in a market economy are maximally greed. When companies didn't raise prices in 2018: that was due to greed. When companies did raise prices in 2021: that was due to greed. When companies lower prices: that's also due to greed. No one, precovid or not, priced their items based on benevolence or something.
They just believed that if they raised prices, they would make less money. Now that they don't believe that.
Yeah, there is no way to dispute that increased corporate net profits have contributed to price increases. That is all public information. But like labor, it's just one of several factors.
Yeah, there is no way to dispute that increased corporate net profits have contributed to price increases. That is all public information. But like labor, it's just one of several factors.
Even if you're correct about the costs of labour, this is also a factor for small businesses. Including local burger joints the big fast food chains have to compete with. And minimum wages affect...
Even if you're correct about the costs of labour, this is also a factor for small businesses. Including local burger joints the big fast food chains have to compete with. And minimum wages affect SMEs more than bigger corporations due to their smaller revenue and profits. With the particularly big corporations like these fast food chains this is even more due to the things you point out:
And those labor costs don't just affect the restaurant directly. Every single link in the food supply chain from farming, to food processing, to transportation and logistics has incurred similar cost increases. The restaurant is at the end of the food chain and has also had to incur the cost increases from everything upstream from it.
In the case of the bigger joints, they have their own factories for all their equipment, sauces, and more. This kind of specialisation generally lowers costs for the biggest corporations.
Also, speaking as someone from a place with a much higher minimum wage(the Netherlands) I call bullshit on the entire link of minimum wage. I've lived in both countries and in both cases 10 out of 10 times I'd rather visit a local joint. Better food, better service, for comparable prices.
Labour is the biggest cost in the service industry as a whole. But personally I consider the correlation they draw in this article questionable at best.
It does. This affects small and large businesses alike. Smaller businesses have smaller revenues and profits from a dollar perspective, but also lower expenses (eg fewer people). The important...
Even if you're correct about the costs of labour, this is also a factor for small businesses.
It does. This affects small and large businesses alike. Smaller businesses have smaller revenues and profits from a dollar perspective, but also lower expenses (eg fewer people). The important thing to look at here is profit margins. Comparing revenue and profits as dollars between a small business and large corporation is a useless comparison.
In the case of the bigger joints, they have their own factories for all their equipment, sauces, and more. This kind of specialisation generally lowers costs for the biggest corporations.
Yes, there becomes a point where absorbing all of the capital costs for an entire manufacturing operation becomes more cost-effective at the scale of large corporations like McDonalds. But just because they own their own factories doesn't mean that they're immune to cost increases happening everywhere else in the market. Raw materials, transportation and labor of their factory workers would all increase with the rest of the market.
I'd rather visit a local joint. Better food, better service, for comparable prices.
I agree that I'd rather visit a local joint, but in my experience in the US (never visited the Netherlands), there is still a cost difference. A Big Mac value meal near me is $9 (at least according to their website). To get a burger, fries and a drink at an independent shop near me would be somewhere in the vicinity of $15-$20. The places that used to be cheaper have all closed. Yeah, that local burger is going to be way better and I'm absolutely willing to pay extra for the better food if I'm going out, but it's still more. You're getting what you pay for.
To clarify: I did mean profit margins. The point remains that per single burger, it's easier for McDonalds and similar corporations to hire less people. This is correct. This also affects small...
It does. This affects small and large businesses alike. Smaller businesses have smaller revenues and profits from a dollar perspective, but also lower expenses (eg fewer people). The important thing to look at here is profit margins. Comparing revenue and profits as dollars between a small business and large corporation is a useless comparison.
To clarify: I did mean profit margins. The point remains that per single burger, it's easier for McDonalds and similar corporations to hire less people.
Yes, there becomes a point where absorbing all of the capital costs for an entire manufacturing operation becomes more cost-effective at the scale of large corporations like McDonalds. But just because they own their own factories doesn't mean that they're immune to cost increases happening everywhere else in the market. Raw materials, transportation and labor of their factory workers would all increase with the rest of the market.
This is correct. This also affects small businesses because the entire supply chain gets more expensive on it's own. However, bigger corporations also need to pay less for maintenance due to specialised workforce. As you've pointed out earlier yourself, labour cost is the biggest cost in the service industry.
I agree that I'd rather visit a local joint, but in my experience in the US (never visited the Netherlands), there is still a cost difference. A Big Mac value meal near me is $9 (at least according to their website). To get a burger, fries and a drink at an independent shop near me would be somewhere in the vicinity of $15-$20. The places that used to be cheaper have all closed. Yeah, that local burger is going to be way better and I'm absolutely willing to pay extra for the better food if I'm going out, but it's still more. You're getting what you pay for.
Well, I'm fine to disagree on this point. But personally, last time I had food there I just didn't think it was worth the price. Both in quality and quantity... if I ask myself 'am I willing to pay for this when I look at how long I have to work to receive this money'... the answer is no.
Have they tried making the food actually worth the prices necessary to be profitable?
We eat less McDonald's and other franchise fast food because the prices have risen so much that it's no longer the cheap option. Plenty of fast-casual places offer the same amount of food for a similar price, but at a much higher quality.
At these prices, McDonald's is starting to compete with local burger joints that make way better burgers.
I suspect that the real money sink are franchisee fees and advertising. Small local places don't buy superbowl ads and don't owe a chunk of their monthly profit to some real estate company based in Chicago.
I don't really buy fast food, but the only time I will is on a road trip. For that I might still go to McD's and get a McFlurry or something just for the sake of having a McFlurry, even though I can tell the prices are out of control. I can't imagine them actually having regulars that accept the prices. Pretty much any other option is better.
Very true. Last time I had to grab one because I was seeing a friend in hospital and I deeply regretted it. Not cheap, with terrible dry bread and a dried up excuse for a patty. No ketchup unless you notice that they haven't dropped any sachets in the bag and ask, then they begrudgingly give you 1, maybe 2 packets, I had to ask for more... Just a horrible meal and an unpleasant consumer experience. I'll go hungry next time or be more mindful to make and pack some sandwiches to take.
Ha! Last time I got some fries and they didn't give me any ketchup. I looked around and realized you can't get any at a self-serve location (no pump, no packets). So I went to the counter. They ignored me for a minute or two, looking right at me and going off to do other stuff. Then I realized that under the counter they had the packets so I grabbed them for myself. Why all the hassle for a few cents of ketchup?
Everything’s behind the counter now. I’m not a frequent fast-food consumer but when I emerged from pandemic hibernation I was shocked to see how McDonald’s (et al.) dining rooms had changed during covid. It’s an eerie ghost town inside. There aren’t any cash registers up front, having been replaced with self-serve kiosks. All of the employees are in the back behind a wall or visibly ignoring everything except the drive-thru window, which is constantly busier than I remember seeing in the before times. If anyone else enters the dining room, it’s usually an Uber Eats driver, who grabs a bag waiting for them on a rack by the door and immediately departs.
There are no napkins, straws, forks, condiments, or water cups set out. Good luck getting anyone’s attention behind the counter, if you’re eating in the restaurant you don’t exist to them. The restroom doors are locked and no one will give you the code. Did I mention how terrible the self-serve kiosks are? Finding what you’re looking for and correctly inputting it on the touch screen takes ages now. It took me about five minutes just to order dinner for my family on one, when the whole order could’ve been spoken to a human cashier and paid for in seconds.
Maybe things were already moving in this direction before covid and I just didn’t go often enough to notice, but from my POV every major fast food chain is suddenly like this now and it’s downright dystopian. It parallels the way my local Target and grocery stores now have half of their inventory inside locked cases, with prominent security cameras with attached monitors and security guards posted at the door. Increasingly I feel as a customer that I am viewed with suspicion by default, that prices are skyrocketing at the same time as customer service and product quality are at all-time lows. And concurrently, costs are being cut in visible, hostile ways and the workforce is also being reduced to threadbare levels. All of this happening at once feels like the companies are desperate, like they’re trying not just one strategy but every trick in the book to turn a profit and they don’t have any more levers to pull. It feels like panic.
I find ordering food from a kiosk the most depressing thing ever. Especially if there is actually someone behind the counter but they redirect you to the kiosk.
Really? I much prefer ordering from kiosk. You can much more easily see what the available options are on the menu, as well as customization options. If you go to Japan or Taiwan even at most “sit down” restaurants you order via an iPad or other tablet. I think it works much better.
If it's well engineered, then yes I can see how it's more convenient. But for me it's about the humane aspect of it. Feels like we're literally replacing people with kiosks, and it's again decreasing the interaction we have with eachother. And covid thought us that, after all, from time to time we do need some of that right ;-)?
I guess the hassle is the point, right? You're shameless enough to reach over, I'm irritating enough to ask on principle, but if I hadn't been grabbing it for my partner, I'd probably have just not bothered and eaten a dry burger. I'd be surprised if they were paying more than 5 cents per sachet, but I'm sure some MBA in Chicago got a bonus for cutting down on ketchup spending at a fast food restaurant.
Saving on ketchup but cutting into the value margin.
Saw a "conspiracy" theory somewhere that what they are doing is to increase prices astronomically, say from $10 to $20 for a menu, and then lower the prices to $15 after everyone's gotten used to the high prices. Because then they will be able to say that they are back to being super duper cheap.
We'll see if it checks out in future I guess.
Prices lowering in the future wouldn't be confirmation of a conspiracy though. They may raise then lower prices for any number of reasons.
That implies a level of understanding of the market from McDonald's that is unrealistic. I think the process is more like a slime mold (lots of independent actors - franchisees) performing gradient descent (tweak one variable, see if profit improves). The big macro events of the world change the actual gradients which change the results of the descent process.
What would the point of this conspiracy be?
I assume it's similar to the conspiracy where New Coke was deliberately bad to drive up sales of Coke Classic when they brought it back.
How dare they bring in California minimum wage increase in the article, when the rest of the country still saw declines in customer visits and insane price hikes?!
There's also marketing fees charged on top of royalties, and don't forget the initial start up costs to get the restaurant looking a certain franchise way. Labour costs is a lot, sure, but it's not the only or even biggest reason why franchisees are having a hard time. Even regular restaurants are having a hard time because the cost of basic food ingredients, utilities, insurance....everything has gone insane.
Something else that I'm not seeing anybody mentioning: for some strange reason, everyone seems to have forgotten that we just had a global pandemic. Essential workers and food services were where the highest transmission rates hit: people who worked minimum wage in order to stay afloat and could not afford to miss a single day of work. Companies are complaining about the price hikes in labor costs and pointing the finger at regulation, when in reality they've been forced to raise wages because a not insignificant portion of the minimum wage workforce died. And now they're passing their terrible pandemic-era decisions down to consumers. At this point it's not even surprising anymore, but frankly speaking: how is it possible that everyone's managed to collectively forget so quickly? And now bending over backwards to headcanon corporate justifications?
I was watching a Red Letter Media youtube video yesterday on the death of cinemas, and they also mentioned how everyone has forgotten about covid now. They were saying it in the context that cinemas can't blame "fear of being with lots of people in a closed space" as a reason for movie-goer numbers to be down. Big concerts are packed with people again, conventions are at full strength, travel is back to normal. The pandemic has been almost erased from our collective memory. Nobody really wants to remember it, I think that's part of why.
Essential works got screwed everywhere. Almost right after the pandemic nurses and other medical staff were on strike in parts of the UK and Europe because, despite being "essential", their pay was crap, their hours ridiculous, and their working conditions abusive. Food service is understaffed everywhere too because, surprise, the pay is bad so nobody wants to do it. Dealing with the public sucks as well, people are ruder than ever.
When the pandemic was first heating up, I remember reading about the weird historical silence that followed the previous pandemic, the Spanish Flu outbreak of 1918. I wish I had the link to the article, I think it was posted on Tildes. The gist of it was that after the world emerged from a massive plague with a staggering death toll, people just… never talked about it. And the article speculated about how that could happen, if it was some sort of collective embarrassment or just a desire to forget or something.
And now here we are just a handful of years past our own pandemic and the same thing is happening. The silence is deafening. Personally, I was profoundly traumatized by the experience (and I didn’t even lose anyone to the disease). I was an introvert who had worked hard to cultivate a social life, and lockdown and the move to remote work shattered my relationships and reset my progress to zero. I’ll be trying to reclaim that lost ground for years.
The experience of living through the pandemic broke me in ways that are hard to articulate. I perceive that it broke a lot of things that remain broken today, like the weird atmosphere of people just plain being brazen dicks in public… but again it’s hard to articulate and anecdotal, and people look at me funny if I suggest it’s pandemic-related. The world kinda sucks now, in new ways that it didn’t suck in back in 2019. Of course the pandemic was a factor. It happened. It affected everyone. Its effects continue to ripple forward through time.
I got sick with covid again a couple weeks ago. I felt strange even acknowledging that, that it wasn’t just a generic “cold.” I took an antigen test, I was covid positive. But nobody I know even uses the word covid anymore, even if that’s precisely what it is. I feel silly for bothering with the covid test. Even the CDC recommendations now lump covid together with colds and flus under a generic “respiratory infection” header that doesn’t mention testing in its guidance. Granted, the strains circulating now are way milder and generally regarding it like other sniffles is appropriate, but I feel… weird… not even naming it. Why are people so reluctant to talk about it, or think about it, or admit that it’s the cause (or at least a factor) behind so much of the crap happening today?
What is an example of somewhere where you'd expect to see reference to COVID and don't? I don't think it's "trauma" or anything, I still see COVID referred to when it's obvious, or more often as a punchline, but it just... does come up that much?
I don't think it was all that traumatic for most people, so now that you don't think about it anymore, it just slips the mind.
I disagree. Labor is one of the largest expenses in the restaurant industry. Aside from California's minimum wage laws, the actual federal minimum wage is pretty much moot in the rest of the country. Fast food places are now having to pay $12-20/hour for workers even though minimum wage is still $7 or whatever.
And those labor costs don't just affect the restaurant directly. Every single link in the food supply chain from farming, to food processing, to transportation and logistics has incurred similar cost increases. The restaurant is at the end of the food chain and has also had to incur the cost increases from everything upstream from it.
To be clear, corporate profits (or greed if you want to call it that) do factor into this. But labor is, and continues to be one of the largest expenses for a restaurant.
I agree with you that it's one of the largest. But is it in fact the single largest? And I mean, you can't also factor in wages every step of the way as reason for why either, that doesn't seem fair? We wouldn't look at "oil prices have risen" and factor that in from the plastics used at the farm to the gas it takes to get food in....right?
I could randomly search, and I dont want to push the burden back onto you, but if there are easy and good known sources, I would like to see some actual break down of costs to run a franchise restaurant. This random site says 25% to 35% of total revenue). So a huge chunk, agreed, but they've got to pay 75-65% for other stuff even if they have zero workers and just robots right? Does that explain why price of fast food has risen higher than wage increase?
And then, what is the alternative? Canada is terrible for just pushing non-living wage work onto "temporary foreign workers". But if these places can't survive without exploiting TFW, maybe they shouldn't exist.
That link that you sent does seem to indicate that labor could indeed be the largest cost by percentage. It might depend on the restaurant. It says 25-35% of total revenue for labor, and that the actual food and beverage cost is another 28-35%.
I'd say that the price of fast food has risen higher than average national wage increases, but not higher than the fast food industry's wage increases. Fast food was commonly paying minimum wage previously. They're now having to pay 200-300% of minimum wage. So because fast food (and its associated industry) has experienced higher-than-average wage increases, it's expected for it to also have higher-than-average price increases. It's not the only reason for the increase (McDonalds corp has had a healthy increase in its profit margins over the years), but it does account for a lot of it.
Maybe they shouldn't, and maybe they won't going forward. The only reason McDonalds exists is because tens of millions of people pay for it every single day.
It pains me that your comment is the first place I’m seeing any mention of corporate greed as an explanation for all the price hikes whereas the article and even some of these comments directly reference labor costs and vague upstream cost increases.
Chipotle used the labor excuse too and yet their profits were up almost 200% from last year and their CEO got a $30 million bonus. McDonald’s gross profit in 2023 was almost $15 billion.
Greed wasn't the change. All players in a market economy are maximally greed. When companies didn't raise prices in 2018: that was due to greed. When companies did raise prices in 2021: that was due to greed. When companies lower prices: that's also due to greed. No one, precovid or not, priced their items based on benevolence or something.
They just believed that if they raised prices, they would make less money. Now that they don't believe that.
Yeah, there is no way to dispute that increased corporate net profits have contributed to price increases. That is all public information. But like labor, it's just one of several factors.
Even if you're correct about the costs of labour, this is also a factor for small businesses. Including local burger joints the big fast food chains have to compete with. And minimum wages affect SMEs more than bigger corporations due to their smaller revenue and profits. With the particularly big corporations like these fast food chains this is even more due to the things you point out:
In the case of the bigger joints, they have their own factories for all their equipment, sauces, and more. This kind of specialisation generally lowers costs for the biggest corporations.
Also, speaking as someone from a place with a much higher minimum wage(the Netherlands) I call bullshit on the entire link of minimum wage. I've lived in both countries and in both cases 10 out of 10 times I'd rather visit a local joint. Better food, better service, for comparable prices.
Labour is the biggest cost in the service industry as a whole. But personally I consider the correlation they draw in this article questionable at best.
It does. This affects small and large businesses alike. Smaller businesses have smaller revenues and profits from a dollar perspective, but also lower expenses (eg fewer people). The important thing to look at here is profit margins. Comparing revenue and profits as dollars between a small business and large corporation is a useless comparison.
Yes, there becomes a point where absorbing all of the capital costs for an entire manufacturing operation becomes more cost-effective at the scale of large corporations like McDonalds. But just because they own their own factories doesn't mean that they're immune to cost increases happening everywhere else in the market. Raw materials, transportation and labor of their factory workers would all increase with the rest of the market.
I agree that I'd rather visit a local joint, but in my experience in the US (never visited the Netherlands), there is still a cost difference. A Big Mac value meal near me is $9 (at least according to their website). To get a burger, fries and a drink at an independent shop near me would be somewhere in the vicinity of $15-$20. The places that used to be cheaper have all closed. Yeah, that local burger is going to be way better and I'm absolutely willing to pay extra for the better food if I'm going out, but it's still more. You're getting what you pay for.
To clarify: I did mean profit margins. The point remains that per single burger, it's easier for McDonalds and similar corporations to hire less people.
This is correct. This also affects small businesses because the entire supply chain gets more expensive on it's own. However, bigger corporations also need to pay less for maintenance due to specialised workforce. As you've pointed out earlier yourself, labour cost is the biggest cost in the service industry.
Well, I'm fine to disagree on this point. But personally, last time I had food there I just didn't think it was worth the price. Both in quality and quantity... if I ask myself 'am I willing to pay for this when I look at how long I have to work to receive this money'... the answer is no.