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  • Will a Fast-Food Chicken Surcharge Become a Thing?
Fast Food

Will a Fast-Food Chicken Surcharge Become a Thing?

April 30, 2022
Elizabeth W. Jernigan

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  • What’s More Expensive at the Drive-Through?
  • Will Other Fast-Food Chains See Increases?

This year has not been a pleasant one for those trying to save money.

First, visits to refill your gas tank have become an unfortunate realization of just how much a war on the other side of the world affects supply and demand in our everyday lives.

Prices at the pump shot above $4 a gallon in many areas of the U.S., while West Coast states such as California recorded prices as high at $6, forcing some to leave their cars in their driveways and seek other modes of transportation.

Second, visits to the local grocery turned up empty shelves where the products we’re used to seeing usually sit.

Grabbing an avocado to make a quick guacamole, for instance, became an errand you might have to visit multiple grocery stores to accomplish. And even after that, there was a chance you still might go home empty-handed.

Not only was some food hard to find, but the costs surged as well. Goldman Sachs economists reported an 11% increase over the past two years, with a forecast 5% to 6% rise for 2022.

And now you may have to fork out a little more than you’re used to at yet another venue: the fast-food drive-through.

Noodles & Co. Lead KL

Noodles & Co.

What’s More Expensive at the Drive-Through?

During its first-quarter earnings call on April 28, pasta chain Noodles & Co.  (NDLS) – Get Noodles & Co. Class A Report said that it temporarily would add a $1 surcharge to all chicken dishes to offset the rising costs of poultry.

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Chief Financial Officer Carl Lukach said that chicken costs in Q1 were 70% higher than they were a year earlier. More than half the Broomfield, Colo., chain’s customers order dishes with chicken, which put a major crunch on the company’s spending.

Lukach stressed that the surcharge was “one-time and fairly short-lived as the market is expected to normalize fairly soon.”

Will Other Fast-Food Chains See Increases?

The food industry is struggling with the impact of inflation on the whole. The National Restaurant Association reports that menu prices have risen 6.9% over the past 12 months, while grocery prices are up 10% year over year.

Noodles & Co. is one of many companies making adjustments to combat inflation costs. After an earnings call where Starbucks  (SBUX) – Get Starbucks Corporation Report fell short of its Wall Street forecast, the coffee chain announced a price increase for its menus coming later this year.

Chipotle  (CMG) – Get Chipotle Mexican Grill, Inc. Report made a similar announcement in its March earnings call, when Chief Financial Officer John R. Hartung said that “inflation on beef and freight and, to a lesser extent, avocado costs more than offset the leverage from our menu-price increases.”

While chains like McDonald’s  (MCD) – Get McDonald’s Corporation Report have yet to announce a price increase, it’s a possibility it could be next, as it has said that it’s dealing with higher costs as well. 

“We saw about a 3% increase in food and paper costs in 2021, and that increase is supposed to be around double also in 2022,” said Kevin Ozan, executive vice president and chief financial officer, during the company’s Q4 2021 conference call.

Some businesses have tried approaches other than raising their prices to offset the increased costs. 

Inspire Brands’ Buffalo Wild Wings has focused its promotions on boneless wings over bone-in due to pricing, while Wingstop  (WING) – Get Wingstop, Inc. Report and BJ’s Restaurants  (BJRI) – Get BJ’s Restaurants, Inc. Report now offer chicken thighs on their menus.

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