McDonald's, Burger King, KFC, Popeye's Have Good News for Fans

In a time of rising prices, higher costs, and fewer deals, these fast-food giants finally caught a break, and that should mean deals for you.

Fast-food giants have struggled to maintain a balance between value and profitability. 

They want to keep prices low but can't do that at the expense of the bottom line. That's a really challenging position to be in as prices have risen for core menu items including beef and chicken.

In some cases the chains pivoted to making their menus more diverse and spread their risk, In fact, McDonald's (MCD) - Get Free Report, Wendy's (WEN) - Get Free Report, and Restaurant Brands International (QSR) - Get Free Report pushed chicken sandwiches for a time because beef prices were rising. For all of 2021, however, chicken prices were up steadily over the previous year.

That forced companies to make changes, like Wendy's offering its 4 for $4 only with a Jr. Cheeseburger, pushing sandwich choice (and the option for a chicken sandwich) into the $5 Biggie Bag deal. Burger King did similar things, raising the price and bringing chicken products in and out of its value deals.

Of course, chicken chains like Popeye's and Yum Brands'  (YUM) - Get Free Report KFC have not had the same flexibility; they've had to accept either thinner margins or higher prices. And Chipotle (CMG) - Get Free Report, where chicken is the biggest seller, is also one of the chains that has raised prices by the most this year. 

Now, the fans of fast-food chicken, as well as the chains that sell it, have gotten some good news as prices have steadily fallen over the past four months.

Fast-Food Chains Get Some Price Relief

The prices of chicken wings and breasts have fallen steadily for the past few months, which is welcome news when costs for just about everything remain high. That may help fast-food chain reverse, or at least halt, price increases, which have been meaningful for customers.

Some of the numbers are startling, and menu-tracking site Pricelisto.com shared some 2021 pricing data in December.

"Wendy's made some of the biggest overall price hikes in the last year -- $4.90 for the average menu item in September 2021 and $6.63 in October 2022 for an increase of 35%," TheStreet's Veronika Bondarenko reported.

"Chick-fil-A prices rose 15.6% from $4.02 for an average menu item in 2021 to $4.65 in 2022 while Taco Bell saw price increases of 14.6% from $2.94 to $3.37" 

Chicken was a major driver of those increases, with Burger King's Chicken Fries. rising by 16%. In addition, Chick-fil-A's Grilled Chicken Sandwich saw its price jump by 10% to $7.23 from $6.57 last fall.

Falling chicken prices will enable all these chains to consider putting chicken sandwiches or other chicken products into value deals or offer them at discounts.  

Fast-Food Chicken Relief Might Be Shortlived

Fast-food chains remain vulnerable to the overall market for chicken. David Maloni, food-service-supply-chain analyst and president of Datum FS, told Restaurant Business Online that chicken prices have bottomed and will move higher over the next six months.

“There are signs that chicken producers have started to pull back on production,” he said. “Margins for chicken producers declined to historically low levels and feed prices are elevated. These lower chicken prices are not sustainable in the long run.”

This could be a case of counting your blessings as they come for McDonald's, Wendy's, and Burger King -- enabline them to offer chicken deals for the moment.

Burger King has been pushing a number of chicken sandwiches based on its Classic Chicken Sandwich and Wendy's recently made an Italian Chicken Sandwich a focus of its marketing efforts.

In the short term. both stores and customers should get some pricing relief. That may not be a long-term change, but given the news of the past year, this is a welcome development for everyone who sells or eats fast food.