Fast food now a luxury for 60% of low-income adults, consumer survey finds

More than 60% of low-income Americans consider fast food a luxury they can no longer afford, according to a survey by a consumer research firm.

The Collage Group released its findings this month, as casual restaurant chains that had long attracted working-class families have hiked menu prices since the pandemic to offset rising labor and production costs.

The research firm surveyed 4,935 consumers aged 18 to 78. They included 2,310 people who earn less than $50,000 a year, 1,748 who earn $50,000 to $149,000, and 337 who earn $150,000 or more.

Over the past six months, 34% of lower-income survey respondents reported spending less on quick-service restaurants. By contrast, 28% of middle-income and 18% of high-income adults reported doing the same.

The survey found that 24% of low earners plan to spend even less on fast food in the future, compared with 21% of middle and 12% of high earners.

“Fast food used to be a go-to for lower-income Americans … to save money and time,” said Jenny Wolski, research manager of cultural insights for the Collage Group, which is based in Bethesda, Maryland. However, this has changed recently. The higher costs now outweigh the time-saving benefits, pushing lower-income Americans back to grocery stores to save money.”

McDonald’s, the world’s largest fast-food chain, filed a federal price-fixing lawsuit last month accusing leading U.S. beef producers of driving up the cost of restaurant burger patties by conspiring to inflate cattle prices.

At one Connecticut location, the cost of a single McDonald’s Big Mac — the company’s signature double-decker cheeseburger — with fries and a drink soared to $18 this year.

The Chicago-based McDonald’s Corp. announced Friday it will unveil a new “McValue” menu on Jan. 7 to help shore up the company’s declining appeal to working-class customers.

“When it comes to value, we know there’s no one-size-fits-all. We’ve worked closely with our franchisees to create a new platform that will let our customers define value on their own terms,” said Joe Erlinger, president of McDonald’s USA.

The Collage Group, which specializes in research among minority groups, noted that lower-income adults have become less likely than others to eat at quick-service restaurants as food and housing prices have soared in recent years.

Ms. Wolski said just 41% of low-income adults now buy fast food “once a week or more,” compared with 54% of middle-income and 69% of high-income consumers.

Another 41% of lower-income adults responding to the company’s recent survey said they buy food at dollar stores.

Collage Group said financially struggling Americans were more likely than those in higher income brackets to spend more of their salaries on food, worry about food prices, buy generic food and avoid restaurants and bars to save money.

Angelica Gianchandani, a marketing instructor at New York University, said the survey is “a clear sign that everyday costs are rising too fast for many families to keep up.”

She said the surging costs of ingredients, labor and utilities could damage the U.S. economy if nothing changes.

“This trend affects everyone, as less spending power in a large portion of the population can hurt businesses and the economy,” Ms. Gianchandani said in an email. “It also highlights growing inequality, widening the gap between those who are financially stable and those who are struggling.”