Sacramento, CA: Several restaurants have begun implementing cost-cutting measures, such as increasing the prices of their menu items, in response to the decision that was handed down in September, which said that California fast food franchisees would be compelled to raise the minimum wage for employees to $20 beginning in April.
The Golden State’s fast-food and fast-casual businesses, such as McDonald’s, Chick-fil-A, and Pizza Hut, have increased their prices by around 10% overall since September, according to a new report conducted by the market research firm Datassential. This expansion is significantly higher than that of the United States as a whole, which has seen chains increase their pricing by slightly more than 5%.
With the increase in the minimum wage, a number of fast food businesses have announced that they will be increasing the pricing of their menu items.
NBC Los Angeles notes that Kalinowski Equity Research has reported that the pricing of menu items at certain restaurants have increased by as much as 8% since the beginning of April. Wendy’s is the establishment that has led the pack in this regard.
In response to the most recent hike, Chipotle announced in a recent earnings call that it had increased the prices of its menu items at its locations in California by between 6% and 7% in the month of April. According to The Journal, Gordon Haskett Research Advisors discovered that the prices of Chick-fil-A restaurants in the state of California have increased by an average of 10.6% since the middle of February.
Fast food businesses, on the other hand, are able to afford to give their employees a raise, according to a spokeswoman for California Governor Gavin Newsom who talked to The Journal.
According to what he claimed, “These are wages that will go towards basic necessities such as rent and groceries.”
Because the wage rule in California does not apply to establishments that have less than sixty nationwide locations, the higher labor costs do not have an effect on local eateries that are smaller and more independently owned.
In order to take advantage of the reduced pricing offered by small neighborhood companies, some customers are going to them.
An individual named Seth Amitin, who is a therapist based in Los Angeles and is 39 years old, shared with The Journal that he witnessed the price of his typical lunch, which he purchases once a week at a Chick-fil-A in Hollywood, increase to $20.
“Just a few steps away from here is a place that serves some great tacos. They held the price of their burritos at ten dollars. “Undoubtedly, I will be eating there more frequently,” Amitin confirmed.
