Chili's, McDonald's And The Battle For The $11 Combo: Drive-Thru Diary

CALIFORNIA — The day before Coachella, I found myself in Indio with a late-night hankering for a good meal. There were few choices at that hour: the typical array of fast food, taco joints or Applebees.

In desperate need of a comfy booth, friendly service and a frosty beverage after battling hours of traffic, the chain known for "Eatin' Good in the Neighborhood" won. But much to my surprise it also proved to be the best value — an illustration of how sit-down chain restaurants are increasingly competing with fast food standbys in the face of rising costs.

Applebee's 2 for $2x menu offered a satisfying spread for me and my friend: two burgers with fries and two Caesar salads. After a pair of $5 margaritas and tip, we were out the door for under $50.

One of Applebee's closest competitors is leaning even more heavily into the effort to woo price-conscious consumers away from the drive-thru.

"Chili's Grill & Bar sees fast food fans growing frustrated with the rising cost of fast food combo meals," company officials announced in a written statement. The chain's answer? With "flavors fast food lovers will recognize," the Chili's Big Smasher burger is painted as a beefier, more satisfying alternative to a Big Mac in one advertisement.

The burger is a new addition to Chili's 3 for Me menu, which since 2022 has offered an entree, side, appetizer and drink for $10.99. Compare that to a Big Mac combo at a McDonald's in Monrovia — down the street from a Chili's — which costs $10.19 and is missing the appetizer included with the Chili's deal.

Combos like these prove a refrain from fast-food fans that's become louder in recent years: The drive-thru — once a bastion of quick, cheap eats — is becoming just as expensive as eating at a restaurant.

It's something McDonald's is well aware of.

"We certainly know consumers are more wary — and weary — of pricing and we're going to continue to be consumer-led in our pricing decisions as we look forward to 2024," McDonald's CEO Chris Kempczinski said in a February earnings call.

An analysis from The Street found that fast food prices have, in many cases, far outpaced the approximately 21.5-percent inflation since 2020: The cost of McDonald's fries jumped 134 percent. A Taco Bell Beefy 5-Layer Burrito is up 118 percent. And Chick-fil-A nuggets have nearly doubled in price. Has your paycheck kept up with that pace?

McDonald's had also been coping with declining visits and a trend in which customers earning $45,000 or less are spending less, Kempczinski said. And that was before California's $20 minimum wage for fast food workers took effect in April.

"We have looked at price, although I can't charge $20 for a Happy Meal," Scott Rodrick, a franchisee who operates 18 McDonald's in California, told CNN. "My customers' appetite to absorb menu-board prices is not unlimited."

Business Insider reported that layoffs, trimming staffing and hours, dropping benefits and touchscreen order kiosks are among the ways fast food restaurants are trying to maintain profits amid increased labor costs.

Though the minimum wage increase is not yet two months old, many major fast-food chains weren't exactly suffering during the pandemic inflation boom.

According to Macrotrends, a stock research firm, McDonald's annual gross profit for 2023 was $14.5 billion, a 10.26 percent increase from 2022, which saw a 5 percent increase from 2021.

Macrotrends reports that Chipotle's annual gross profit for 2023 was $2.59 billion, a 25 percent increase from 2022, which saw a 21 percent increase over 2021.

So, cheap-eats aficionados: When it comes to your next meal, you'd be wise to fire up those chain apps and compare the prices for yourself. You just might find a more appealing value somewhere you least expect it.

SEE ALSO:

• Get The Festival's Music And Food At Home: Drive-Thru Diary
• The Best 4/20 Food Deals: Drive-Thru Diary
• Krispy Kreme And McDonald's Try To Shake Up Doughnut Culture: Drive-Thru Diary
• Bojangles To Bring Its Southern Fried Chicken To CA
• 5 Things To Know About CA's $20 Fast Food Minimum Wage
• Prices Spike At In-N-Out, Burger King And More With $20 Minimum Wage

Drive-Thru Diary is a journey of all that's delicious, noteworthy and downright weird in the world of fast food, quick bites and the culinary field at large. Got an idea? I'd love to hear from you: [email protected].