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Fast Food and Inflation
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Photo: PrNewsWire
I recently stopped into a Kentucky Fried Chicken for quick bite on the way home from the airport. I don't eat fast food often, but it's great in a pinch, and sometimes that southern fried crisp just can't be beat.
While waiting for my order I noticed an old picture hanging on the wall near the soda machine. The picture showed the Colonel standing in front of the first retail KFC store in 1952, and referenced the price of a bucket of chicken that fed a family of five: $3.50. I thought that price seemed really low, so I quickly ran back to check the menu at the counter and noticed the current price for the same bucket that feeds a family of five: $18.11.
I was supremely curious so I went to check out McDonald's to make a comparison. The current price of a BigMac is about $3.75. My research indicated that the same sandwich cost just $0.45 when it came on the scene in 1967. For some reason, those figures seemed more palatable, but when I got home to crunch the numbers I was surprised at the results.
The KFC bucket of chicken has increased at an average rate of 2.93% per year since 1952, while the BigMac has increased at an average yearly rate of 5.18%. Inflation in the United States has remained steady for the last half century; about 2.65% per year. That means the bucket of KFC chicken which feeds a family of five has kept pace with inflation, while the BigMac has outpaced inflation more than 2:1.
Don't make the mistake of thinking these small price increases are insignificant. In these tough economic times just a small increase in prices can make it hard for a family to afford the staple food and beverage items. The Bureau of Labor and Statistics keeps track of inflation and the consumer price index (CPI) for various items. What you'll notice is the CPI increase (for food and beverages) has remained relatively constant over the years, around 4%. Going back to our numbers, the BigMac price has increased at an average rate of over 5% per year, more than inflation and more than the CPI.
While BigMac's aren't staple items, they do seem to be getting more popular every year. If you want to find out more about data and statistics tracked by the BLS visit their website here.
