California fast-food prices rose 7% in run-up to $20 minimum wage — highest in US
Fast-food prices in California rose 7% in a six-month period leading up to the state’s new $20-an-hour minimum wage law that has forced franchisees in the Golden State to cut back on work hours, postpone capital improvements and expedite the rollout of self-serve kiosks.
California registered the highest rate of menu price inflation in the country in the period leading up to April 1 — when the minimum wage increase from $16 an hour to $20 an hour went into effect, according to a study by analytics firm Datassential.
Washington State saw the second highest price hikes for fast food menu items, which rose 6.1% during the same period.
Kentucky was No. 3 at 6%. Nationwide, fast food prices rose by 4.5% in the six months preceding April 1.
The study found that all of California’s 30 area codes were in the top 30% of the highest price hikes for menu items in fast food restaurants.
The 530 area code, which covers most of Northern California, saw the highest net menu price inflation among fast food restaurants in the country — 8.9%.
Out of 288 US area codes, California had four of the nation’s top 10 places for price hikes.
Riverside County, which includes the 951 area code that encompasses towns such as Coachella, saw the seventh-highest price increase for fast food menu items in the country — 7.9%.
The 209 area code that covers the Stockton, Calif. region, was No. 9 at 7.9% while the 510 area code in and around Oakland was tenth highest at 7.8%.
The 916 area code (Sacramento) and the 442 area code (Southern California) both saw a 7.6% increase — which ranked it No. 13 and 14 nationwide, respectively.
Full-service restaurants, which include sit-down restaurants that encompass mid-scale chains and fine dining establishments, raised menu prices by 2.4% nationally during the same six-month period, according to Datassential.
In California, their prices were hiked 3.3% — third highest behind Hawaii and Washington State.
Earlier this week, a report by Kalinowski Equity Research found that fast food chains such as Wendy’s, Chipotle, Starbucks and Taco Bell raised their menu prices by as much as 8% in preparation for the new minimum wage law coming into effect.
Wendys raised its menu prices by around 8% while Chipotle Mexican Grill hiked its prices by approximately 7.5%, according to the report.
Starbucks, the Seattle-based coffee chain, raised the prices of its menu items at its California locations by around 7%, while Taco Bell hiked its prices 3%.
