Fast food restaurants in California have been increasing menu prices at a faster rate than anywhere else in the U.S. — and were doing so even before the state’s new minimum wage law went into effect, according to an analysis conducted by global food and beverage intelligence company Datassential.
Using its AI-powered Price Monitor tool, the market research firm found that California increased menu prices by 7% in the six months leading up to the wage increase. That change has been more significant than anywhere else in the country, the firm noted.
Datassential’s analysis is based on data it gathered between Sept. 2023 and April 1. 2024, the day the new law went into effect. California’s state law increased the minimum wage of fast food workers by $4 to $20 an hour. The law applies to chains with over 60 locations nationwide.
Although the change stands to elevate employees, it has forced restaurant owners in California to make some serious adjustments, such as cutting back on staff, reducing hours, and at times, even closing during slower periods of the day.
According Datassential, in the six months leading up to the wage hike, California’s 30 area codes were all in the top 30% of the highest menu price increase area codes in the country.
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