UNEXPECTEDLY: California Fast-Food Chains Are Now Serving Sticker Shock.
Consumers picking up burgers, burritos and chicken sandwiches at chains in the Golden State are grappling with prices that for months have been rising at a faster clip than in other states, according to market-research firm Datassential.
Since September, when California moved to require large fast-food chains to bump up their minimum hourly pay to $20 in April, fast-food and fast-casual restaurants in California have increased prices by 10% overall, outpacing all other states, the firm found in an analysis of thousands of restaurants across 70 large chains.
Prices at Chick-fil-A, Domino’s, McDonald’s, Burger King, Pizza Hut, Jack in the Box, and other fast-food chains have increased since September, the firm found. Chipotle said in an investor call Wednesday that prices at its nearly 500 California restaurants climbed 6% to 7% during the first week of April compared with last year, playing out across its menu.
“The state isn’t making it easy,” Chipotle Chief Executive Brian Niccol said in an interview.
California raised the minimum wage for fast-food workers to $20 an hour in April, a 25% increase from the state’s broader $16 minimum wage. Supporters, including Democratic California Gov. Gavin Newsom, said the law would improve wages and working conditions for hundreds of thousands of fast-food employees in the state.
About that last part: Fast food chains find a way around $20 minimum wage: Get rid of the workers.
Previously: California, Poverty Capital.