KFC, McDonald's: Fast food just got more expensive
UBS analysts say the Colonel's combo is the best value in town.
The cost-of-living crisis is hitting Aussie families from every angle, and even your fast food favourites aren’t immune.
New research has found some KFC menu items now cost as much as 25 cents more than they did last year. But despite this, it is still the best value fast-food chain.
Looking at the prices of KFC vs rival McDonald’s over the past 12 months, UBS analysis found that while KFC had hiked prices much more aggressively than McDonald's - with the price of some popular menu items rising by more than 20 per cent - a quick feed from KFC was still typically cheaper than the fabled Macca's run.
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What your favourites now cost
KFC's flagship Zinger burger combo cost $8.95 back in June of 2022, but has now risen to $10.95, an increase of 22 per cent, easily outpacing inflation.
However, when compared to a McChicken meal from McDonalds, $12.55 as of June 2023, KFC's Zinger combo is still 12 per cent cheaper.
It's not just the burger combos that are cheaper either. A six pack of nuggets at KFC now costs $7.45, that's 25 per cent more than last year and 5c more than McDonald's charges.
However, once you throw in a drink and some fries, KFC comes out cheaper again. A medium six piece McNuggets meal from McDonald's will set you back $11.90, but KFC's regular combo is almost 5 per cent cheaper, at $11.45.
Fast food prices surge above inflation
Overall, the UBS team found that prices at KFC's Australian restaurants had risen by an average of 14.7 per cent over the past year. However, prices at McDonald's, are up only 8 per cent since August or just 9.6 per cent annualised. McDonald's Australia has been approached for comment.
The latest inflation figure found the cost of living grew at 7 per cent in the year to the March quarter.
Collins Foods, an ASX listed company and the largest operator of KFC restaurants in Australia, were unable to provide a statement, citing disclosure requirements.
The company is set to announce full-year earnings numbers on Tuesday, with experts predicting earnings of 44c per share, down some 13 per cent from last year.
However, the UBS analysts noted that the market is perhaps underestimating the extent of the price hikes.
"While the Australian consumer macro backdrop appears to be softening, we believe investors are materially under-estimating the extent of pricing increases implemented by [Collins Foods],” it said.
Meanwhile, rival fast food player Domino's is still reeling from their last earnings call, forced to backflip on unpopular delivery service fees after demand dropped off a cliff.
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