Let’s Discuss: Fast Food Markups

I came across a colorful illustration of fast food facts while stumbling on StumbleUpon this morning.  I snagged a portion and figured we should start a discussion on fast food markups.  What are the most egregious fast food markups you’ve come across?  Do you skip the fries and soda?  What do you think of “combo meals”?  What’s your opinion on up-sizing your fries and drink?

25 comments on “Let’s Discuss: Fast Food Markups

  1. J.B. says:

    I almost never buy combo meals or fries or drinks from the fast food places because I know what the markups are and I think they are insane.
    I think for a drink the total cost including the syrup, water, cup, top and straw is something like 30 cents.
    I think a fry takes maybe one potato to make and we all know how cheap those are.
    The upsizing charge is just adding insult to injury in my opinion.

    The biggest insult to me is the charge for bottled water, not just in restaurants but in convenience stores. If you buy bottled water as the general public in bulk your cost is about 10 cents a bottle and it is much lower as a reseller, but the stores and restaurants turn around and sell them for a $1 or more which is criminal…unless you are in Chicago. I was there a few weeks ago and the merchants were selling, well trying to sell, bottled water for $3 a bottle by the zoo and the aquarium.

    It was hot and they still had virtually no customers. If they were not greedy little pigs, they could have lowered their prices to $1 or even $1.50 a bottle and sold them like hot cakes and kept on replenishing their stock throughout the day.

    Those markups in the chart you have are way off by the way. They fail to take into account the fixed and variable costs of a restaurant such as rent, labor, utilities, insurance, franchise fees, credit card machine fees, etc etc.

    If you are running a super awesome place, you might make 20-25% profit when everything is all said and done.

  2. jrdunn says:

    Oatmeal! way overpriced for what it is but at the same time its cheap food on the go

  3. Adam says:

    What irks me are the places that charge you extra for “premium” (read: healthier) sides while offering choices for kids meals at no extra prices. Ageism, I tell you, ageism (and yes, CFA, I am looking at your fruit cup!)

    • Natalie says:

      In fairness, the kid sized fruit cup is smaller than the standard small fruit cup. I just hate the grilled chicken sandwiches cost more than fried even though it’s the same piece of chicken used.

  4. Justin says:

    I became aware of this a couple of years ago when I started noticing the trend of places giving away a free entree “with the purchase of one entree and two drinks.” That seemed a bizarre way of doing things, so I looked into it and realized what a high profit margin they were making on those drinks.

    I don’t mind the markup on fries, because it would take too much time and effort for me to make those myself. But it doesn’t take much effort for me to pour myself a glass of cold, not-watered-down soda from a 2-liter bottle that I bought at the store for 89 cents.

  5. Crysta says:

    My husband and I recently stopped going to Taco Bell because of crazy price mark-ups. We went in there a week or two ago, and everything was suddenly a dollar to two dollars more expensive. We’d been there the week before and the prices weren’t that high, so in the space of a week they decided to charge more for the same food. We paid as much there as we would have at the much higher quality Blue Coast Burrito, where we also would have gotten more food for our money.

    That’s just insane to me, to charge such high-end prices for TACO BELL. The quality hasn’t gone up (if anything, their quality keeps going down). They even took the cinnamon twists out of the five dollar boxes, which were the only reason we really went to Taco Bell in the first place.

  6. Keith says:

    I don’t buy soft drinks, period. And I seldom buy anything from a fast food place that’s not on the “dollar” menu. The quality’s just to low to be worth it otherwise. Used to kind of like Taco Bell once in a while, but the last time I bought a taco there it couldn’t have had more than a half ounce of “meat.” Spread very thinly on the inside of the taco, so that I could barely taste it. Not a decent value at any price.

  7. SPM says:

    I seldom buy the combos at fast food places unless there is some special going on for $5 or less.

    There used to be an Arby’s near my work and I used to hate this little game they played. If you order a combo they would ask you if you wanted it medium or large. I was assuming that you had two choices, a medium size or large size. I later realized they were asking this question in a very sneaky fashion, meaning do you want to upgrade to a medium or large.

  8. Chefprotoss says:

    Generally mark ups are there to offset products that have a much smaller profit margin. This applies more to quick serve restaurants though. Sure a large sweet tea costs a nickel or so to produce, but a McDouble is much closer to the one dollar mark that the consumer is charged. If they charged 3 1/2 to 4 times (the proper amount to cover all costs and churn a profit while being fair.) what the actual food cost was for any given item, menus would look really wonkey. 25 cents for a fountain soda, 75 cents for a pound of fries and 14 dollars for ten buffalo wings would confuse most people and lead to no one buying wings. Restaurants take a loss on some items to offset too.

    Oh, and to the people complaining about places like taco bell raising their prices, that’s not tb trying to rip you off, that is tb fallowing with the ebb and flow of the free market. Inflation makes everything cost more. Sure mcdonalds could still sell hamburgers for 10 cents, but they would basically be paying you to eat their food. That would make them a charity not a business.

    Hope this was helpful. =)

  9. Nicki says:

    Soda is the biggest mark-up for sure. A large soda (32 oz) at most fast food places is over $2.00. A soda of the same size at the gas station ranges from $0.99 to $1.48

  10. Natalie says:

    There are obviously mark ups, but I’ve noticed that if I just order the sandwich (or whatever main item) and an order of fries, it’s normally less than .40 cents less than if I went ahead and got the combo (soda included.)

  11. Keith says:

    Responding to Chef: If McDonald’s can afford to offer a limited number of what are pretty much loss leader items, I’m not sure why Taco Bell can’t do the same. For that matter, I’d actually be willing to pay more for a taco with enough taco meat in it to taste. I guess they’ve run the numbers, though, and most of their customers don’t feel the same.

  12. Rhi says:

    YEAH, taco bell irks me the most. A couple weekends ago my family of three went to mcdonalds and it costs 28.00 bucks. Like, what? I could’ve sat down and had a way healthier dinner at Panera or chipotle for that much.

    • J.B. says:

      And that is exactly my point when I say a lot of these older fast food restaurants are going to die off in the future.
      Their prices are now close to and sometimes higher than the places that have fresher, higher quality food so why would you go to them anymore.

      The only thing saving them at this point is the sheer number of locations that they have built up over the years.

    • Thomas says:

      You probably just didn’t have control when ordering. Things are cheap, so you order more and it adds up really fast.

  13. Chefprotoss says:

    I think taco bell is soooooo cheap that people are far more likely to notice small changes. I love me some taco bell, but the food has always been lackluster. Imho the tacos were just as skimpy in the mid 90’s when they were like 59 cents as they are now. Obviously the price increase makes sense. The beef is still driven to the store and just gas alone is about four times higher than in the mid 90’s. Taco bell also offers 4 combo meals for 2 bucks a piece. Sure they suck, but it shows they are trying.

    • Zachary Jacob Zblewski says:

      They raised the $2 meals to $2.49 here. That’s the only price increase I’ve noticed ever the past year or so. The rest of the WPM! menu has stayed the same. (Side note: Why isn’t “Why Pay More!” punctuated with a question mark, either in place of, or in addition to the exclamation point?)

      They also took the cinnatwists/cips&cheese out of the $5 box, so I guess that is a “price” (value?) change too.

  14. somesteve says:

    1. idk but I’m sure there’s a lot of them. 2. Sometimes skip the soda, but rarely skip the fries. 3. combo meals are easy to order and can have some good things that come with it 4. I am fine with up-sizing and I miss the option to supersize my fries at mcdonalds.

  15. rob says:

    When I worked in an ice cream shop as a teen the cup cost the owner more than the soda, so he told us to feel free to give free refills but no free cups.

  16. Chris says:

    All I know is that Wendy’s is getting ridiculous. I spent $8 on a chicken sandwich combo the other day.

    There’s a chain in NC and SC called Cookout that has a $4.25 “tray” that includes a decent burger or sandwich, two sides (wide variety) and a 20oz drink. Wouldn’t you know that they are doing 5 times the business of other local fast food places.

  17. Justin ST says:

    Wow, paying a buck or two for soda and fries is going to kill some of you financially? That’s kind of sad. These places do have to keep the lights on you know. I have a problem with a crappy sandwich at Wendy’s costing $5-7 dollars, but not paying a buck or two for fries and a drink. It’s a fair price.

    JB’s post was kind of pathetic. The zoo in Chicago is FREE! Who cares if you pay $3 for water or whatever in there! You can go to some stadiums out there and pay those ridiculous prices, if not even DOUBLE after paying a ridiculous amount for the tickets!

    Some people are just too cheap for their own good!

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