How COVID-19 is Affecting Restaurant Prices

Uncertainty May Be Holding the Lid on Restaurant Prices
Published by Mike Kallenberger on May 25, 2020

If you’re one of the tens of millions of Americans who visit fast food, fast casual, or casual dining restaurants from time to time, you probably know the value of a dollar. After all, these three restaurant categories are each known for offering good value to their customers.

The pandemic and its ripple effects in March and April have hit Americans hard, the restaurant industry in particular. And yet while some people responded by cutting back on takeout food, others actually started visiting their favorite drive-thru or curbside pickup more often. Value-conscious diners might be curious about the impact of all of this churn on prices – did the pandemic in fact put downward pressure on restaurants’ pricing, either because sales were lower overall or because customers started buying lower-priced items?

We looked at data from PriceListo's database for a set of five restaurant chains in each of the three categories using specific criteria.[1] After slicing and dicing the numbers, here’s what we found: it appears that to date the pandemic has done nothing to lower prices per se, but for four chains whose average price had been steadily increasing before the pandemic, those trends were nipped in the bud - no increases have occurred in the last month.

Let’s break that down a little. provides pricing information for scores of businesses by location, including over hundred restaurant chains – the price of an average item as well as the price of popular individual items. We checked out five of the major players in each of the three categories:

To get a sense of how their pricing compares to one another in general, we chose January of 2020 as the most recent month that would be free of any pandemic-related effects. Figure 1 shows that even within these categories, the price of an average item typically varies by chain. Essentially, some chains are apparently able to command more spending on higher priced items on the part of their customers.[2] Subway has the highest average item price of the major fast food restaurants, although Burger King isn’t far behind; Panda Express’s average price tops fast casual followed closely by Moe's; and Red Lobster is the leader in casual dining.

Price of an Average Item, Jan 2020

Whether because of the pandemic or in spite of it, as of April, Fast Casual and Casual Dining were similar in terms of largest three-month increase in average price. But this was far from a steady uptick, month after month. We also measured the volatility of prices for each chain, in other words, the average change in price in absolute terms from month to month. (See Figure 2.) Fast Casual and Casual Dining also saw wider swings in price from month to month than did Fast Food. This solidifes the belief that Fast Food really is the most consistent and budget-friendly restaurant type.

Average Change and Volatility by Category Jan 2020 - Apr 2020

Breaking this down a little further, the performance by chain has not surprisingly varied greatly. Here we looked at the change from February to April, because this was the period of greatest volatility (possibly suggesting that the pandemic response was driving that volatility). Nine chains had seen their average price increase, two of these sharply (Red Lobster and Five Guys). (See Figure 3.) Three others have held the line with no change in price over these two months: IHOP, Taco Bell, and Panera Bread. And three have actually experienced a decline in their price for an average item: McDonald’s, Shake Shack, and Panda Express. But while the declines for McDonald’s and Shake Shack were a matter of pennies, Panda Express saw a 15-cent decline from February to April.

Change in Price of Average Item Apr 2020 vs. Feb 2020

With all of this in context, let’s look more closely at the performance of the five previously mentioned price leaders across the three segments (Subway, Burger King, Panda Express, Moe's, and Red Lobster.) When we look at trends over the last four months (Figure 4), it’s interesting to see that, not only do these four chains apparently have the marketplace power to sell more higher priced items, that power had been growing. (For the sake of simplicity the data for the other chains aren’t shown, but their trends had largely been flat before March and April and have remained flat afterward.) Each of these four experienced significant increases in that average price heading into the period when the pandemic started making itself felt. Equally interesting, however: each of those four upward trends softened in April of 2020, arguably the first full month for people to react to the changes imposed by the pandemic. That previously 15-cent decline in Panda Express’s average price came on the heels of an upward surge over the prior months.

Price of an Average Item Over Time

Figure 5 brings this home by showing the growth or decline in average price in percentage terms. March saw the biggest increase for three restaurants including Burger King, Subway, and Red Lobster while Februray was the largest increase for Panda Express. All of these restaurants experienced their pricing trend flattening or even declining in April.

Percent Change in Price of an Average Item by Month

How confident are we that the pandemic is responsible for this? After all, “correlation is not causality” may be a cliché, but it’s a cliché because it’s true. To see if we could uncover additional evidence, we singled out Burger King for a state-by-state analysis. Figure 6 graphs Burger King’s April 2020 price change in eight selected states, each of which was put in one of four groups depending on how comprehensive the government-mandated restrictions on restaurants have been.[3]

Burger King Percent Change in Average Price - Apr 2020 States Categorized from Most Restrictive to Least Restrictive

There’s no smoking gun when it comes to identifying the pandemic as the driver of pricing changes, but then, that would be really unexpected given so much in the churn that we can’t account for. Six of the eight states (including at least one in each group) saw virtually no change in Burger King’s average item price compared to the prior month. The other two saw declines. Still, one could argue that there’s a hint of a correlation: the most extreme drop-off in Burger King’s average price took place in Illinois, a first-tier state in terms of restrictions. The other significant decline happened in New Jersey, a second-tier state.

Several chains are now offering box meals and family-sized meals in an effort to counter the impact of the pandemic on their sales. For example, Taco Bell recently added an at-home taco bar to their menu, at a price of $25.[4] Shake Shack is offering their burgers in an 8-pack for $49.[5] The two chains whose upward ascent was most severely curtailed in recent months, Panda Express and Red Lobster, have been particularly aggressive here. Panda Express’s Family Meal includes, among other item, three entrees, starting at $20.[6] Red Lobster’s Family Meal packs serve four for $27.99, including free delivery.[7]

Each of these new, pricier items were introduced in April, or the end of March at the earliest. We noticed that even with the introduction of these higher-end items, the average price of most of these restaurants remained on the same path as it was before, so it's unlikely they've had much impact on the average price.

There’s clearly no way to predict future pricing trends from all of this; that would be too big a challenge even without all the continuing uncertainty about the pandemic and its impact on the economy and our lives more generally. But taken a whole this analysis does indicate two things. First, while restaurant prices may not face any widespread downward pressure, the pandemic may be causing diners to balk when it comes to continued increases in spending on higher priced items. And second, smart restaurant chains will continue searching for ways to change those hesitant diners’ minds.

Raw Data

Number of Locations Used for Data

Restaurant Number of Locations
McDonald's 1,672
Burger King 673
Wendy's 1,036
Taco Bell 999
Subway 2,412
Moe's 271
Panera Bread 416
Shake Shack 39
Five Guys 579
Panda Express 762
Applebee's 583
Denny's 552
IHOP 641
Buffalo Wild Wings 578
Red Lobster 490

Average Price by Restaurant

Restaurant Jan 2020 Feb 2020 March 2020 April 2020
McDonald's $4.08 $4.09 $4.06 $4.06
Burger King $5.67 $5.66 $5.72 $5.72
Wendy's $4.39 $4.39 $4.39 $4.42
Taco Bell $4.34 $4.34 $4.34 $4.34
Subway $6.40 $6.37 $6.48 $6.50
Moe's $5.73 $6.11 $6.23 $6.23
Panera Bread $4.81 $4.80 $4.80 $4.80
Shake Shack $5.61 $5.74 $5.74 $5.69
Five Guys $5.59 $5.43 $5.78 $5.76
Panda Express $6.15 $6.75 $6.78 $6.60
Applebee's $13.88 $13.80 $13.97 $13.97
Denny's $8.07 $8.13 $8.04 $8.20
IHOP $8.35 $8.38 $8.38 $8.38
Buffalo Wild Wings $8.14 $8.12 $8.11 $8.15
Red Lobster $16.99 $17.10 $18.00 $17.77

Average Price by Popular Item

Item / Restaurant Jan 2020 Feb 2020 March 2020 April 2020
Big Mac / McDonald's $5.00 $4.97 $5.00 $5.00
Hamburger - Happy Meal / McDonald's $3.75 $3.75 $3.75 $3.75
Whopper / Burger King $4.94 $4.94 $4.93 $4.93
Impossible Whopper / Burger King $5.92 $5.93 $5.93 $5.93
Chicken Quesadilla / Taco Bell $4.09 $4.09 $4.09 $4.09
Soft Taco / Taco Bell $1.42 $1.42 $1.42 $1.42
Baconator / Wendy's $8.10 $8.08 $8.08 $8.09
6 Pc. Spicy Chicken Nuggets / Wendy's $2.30 $2.30 $2.30 $2.30
About The Author
Mike Kallenberger
1 Conditions used for data export:
  • Exclude all items with a price of 0.00
  • All reports performed using UTC timezone
  • Used all pricing available for specific timeframes (for example, if a McDonald's location at 123 X Street updated their Big Mac price 3 times in Jan 2020, we used all 3 prices to create average. We did not exclude any prices.
  • Items priced over $100 were excluded from the reports as those indicate catering menu and we didn't want those to skew the real numbers.

2 Note that the average price refers only to the data in PriceListo's database. This usually includes a limited number of locations for that business establishment. As such, the average price can be skewed based on the locations of these businesses.

3 Based on