As fast-food prices continue to soar, Americans are looking for ways to get more bang for their buck.
Some say they’re switching to local Latin restaurants and casual dining chains.
Others are just buying more groceries and cooking at home instead.
Like fast-food prices, grocery prices soared during the pandemic. But grocery prices are now largely back to pre-pandemic levels, while inflation at limited-service restaurants still remains elevated.
And some consumers see the benefit of cooking healthier meals at home.
Chad Frye, a cartoonist and illustrator in California, said that he used to be a “fast-food junkie,” eating it around four or five times a week, but that he has cut this down to about twice.
“I do a lot more cooking at home now,” Frye said. “It’s much more economical.”
Thomas Valentine, a 32-year-old from Arizona, said he generally buys prepackaged meals from grocery stores.
“The most cooking I’ll do is throw some chicken thighs in the oven and make some instant potatoes or some ramen,” he said.
For Jordan Sanchez, a 27-year-old loader for a delivery company who lives in California, eggs and chicken tenders are the go-tos. He said he’s started cooking more, both for his health and because of the rising costs of fast food.
Lawrence Milford’s family, meanwhile, is recreating a fast-food favorite at home.
To mimic the taste of dining out, the 48-year-old financial planner from Florida, who has two kids, said his wife sometimes cooks McDonald’s-like burgers “to make the kids happy.”
Grocery stores are fast-food chains’ biggest rivals
Executives are spotting the shift toward home cooking, too.
“Many customers are being more exacting about where and how they choose to spend their money,” Starbucks CEO Laxman Narasimhan told investors at the company’s last earnings call, adding that some customers had been saving money by eating more at home.
McDonald’s has acknowledged this, too.
It all comes down to the “delta” — or the gap — between grocery and restaurant inflation, Danilo Gargiulo, a restaurant analyst at Bernstein, previously told BI.
After all, groceries, not rival restaurants, are the biggest competitors to fast-food chains because people are trying to decide whether to eat at home or get fast food, he said. When fast-food prices rise at a faster rate than grocery prices, consumers notice.
Some grocery stores are seeing the effects of customers’ changing habits. Walmart US CEO John Furner said at an Oppenheimer conference this week that shoppers had started buying more home-cooking ingredients, such as fresh produce, proteins, and dairy.
R.J. Hottovy, head of analytical research at Placer.ai — an analytics company that tracks footfall — told BI that there had been a shift in traffic away from fast-food chains toward full-service restaurants and discount grocery stores in recent weeks. He attributed this to the price increases at fast-food chains.
Diners are turning to Chili’s, Applebee’s, and Mexican restaurants
As well as cooking more, people are changing where they dine to save money.
Some consumers told BI they’re opting for casual-dining chains, independent restaurants, and their neighborhood Mexican and Latin eateries, meaning they can get better-quality food and enjoy a sit-down meal with their families.
“You can get something that tastes really good for almost the same price at a sit-down,” Frye said.
Family-friendly casual-dining chains like Applebee’s and Chili’s typically have broad menus and offer some entrées for under $15. For many diners, it’s about the value proposition.
When Martin Jennings, a 51-year-old truck driver from Florida, and his wife dine out with their kids, they try to visit sit-down restaurants like Chili’s or TGI Fridays “and have better quality food than [getting] a hamburger through the drive-thru.”
“And it’s only a few dollars more. Honestly, it seems lately the only thing we pay extra for is a tip,” Jennings said.
For similar reasons, some diners say they’re heading to independent restaurants, too.
Brooks Ferrante, a 32-year-old construction worker in Florida, said he’d largely ditched McDonald’s and Wendy’s for fast-casual chains like Chipotle and local restaurants selling Cuban and Puerto Rican food. He typically spends $10 or $11 on a meal, including tips.
Ben Heyworth, an account executive in Florida, has made a similar change to his dining habits.
He told BI that some Mexican restaurants near where he live sold better-quality food than fast-food chains and charge between $10 and $15 for an entrée and drink.
“I feel like I’m getting more value,” he said. “You can sit down, it’s got a good atmosphere, better service, better quality food, better options.”
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