The fast food industry is making a major comeback in the United States.
More Americans are turning back to fast food as their go-to for quick, cheap meals, a dramatic departure from the adverse attitude many consumers had a few years back.
Before the COVID-19 pandemic and the subsequent spike in inflation, many Americans saw their food preferences shift toward pricier but healthier alternatives. However, due to the rising cost of food at home (groceries) and at restaurants, many consumers have been leaning on less expensive but unhealthier options.
According to data from the U.S. Government Accountability Office, the Dallas-Fort Worth metro area logged a 14% spike in grocery prices in 2022, the nation’s second-highest price spike last year.
In terms of inflation’s month-over-month impact on common grocery items, Consumer Price Index (CPI) data from July 2023 shows that four of the six major grocery store food groups increased over the month. For instance, meats, poultry, fish, eggs, and dairy products all rose by 0.5% in July, while fruits and vegetables increased by 0.4%.
On a year-over-year basis, CPI data shows that the “food at home index” rose by 3.6% over the last 12 months, cereals and bakery products increased by 7%, and all remaining major grocery-store food groups rose between 1.3% and 5.4%.
This means the indexes for nearly all food groups surpassed the annual pace of inflation over the past 12 months. Despite inflation peaking at 9.1% in June 2022, data shows the food-at-home index peaked at 13.5% in August 2022, and the food-away-from-home index peaked at 8.8% in March 2023.
There are many other reasons why people are turning to fast food in 2023, including the end of pandemic-era food benefits, healthier quick-serve options, an uptick in return-to-work food orders, the general convenience of drive-through lanes, as well as the unrelenting demand for online ordering and food delivery platforms like Uber Eats and Door Dash, as The Washing Post reported.
However, the main reason appears to be cost. Simply put, Americans might be eating more fast food to avoid ballooning grocery prices and expensive sit-down meals, even though such offerings are being increasingly tied to serious medical issues ranging from obesity to dementia.
According to second-quarter sales data for 2023, fast-food and quick-serve chains saw a nearly 6% average increase in sales revenue year over year compared to the roughly 2.5% average increase for sit-down casual and fine-dining restaurants, an industry analysis of more than 40 earnings reports shows, The Washington Post reported.
Ultimately, it is not just consumers who have to penny-pinch when grocery shopping. Major retail grocery chains are also feeling the squeeze from higher food costs, as reported by The Dallas Express in March.
Due to shifting trends caused by the pandemic and inflation, many consumers now prefer to get their food via drive-through windows (+12%) or delivery (+5%), with on-premises dining sliding by 14% between February 2020 and April 2023, according to the National Restaurant Association.
Convenience and taste are the main selling points of fast food, claimed an industry report by the research firm ReportLinker.
“The new advancement in online food delivery is a key trend gaining popularity in the fast-food market,” the market research report said. “Major companies operating in the fast-food market are coming up with new ways to improve the online food delivery experience for customers.”
The return to fast-food fare is not limited to just the United States. Globally, the fast-food market grew from $610.66 billion in 2022 to $652.73 billion in 2023, according to the report. It is expected to grow to $772.17 billion in 2027.
Such developments do not bode well for obesity rates in the United States and the rest of the world.