One of the questions regarding California’s wage increase is how it might spread out. While it applies to a specific group (60-plus unit fast-food concepts), the idea you can lift the tide in one place and not another is thin at best. That same employee now able to make $20 at Chipotle is going to command more in the kitchen of a casual-dining concept.
At the least, brands of all categories, from full service to smaller counter-service eateries, are going to contemplate raising rates to compete with the field. The labor pool was tight to begin with, from gig opportunities, like rideshare, to the notion of navigating a marketplace where people can earn money creating their own content on social media.
And so, it’s not just quick-service restaurants with 60-plus locations raising price across California; it’s nearly everybody.
Using its Price Monitor solution, global food and beverage intelligence company Datassential found menu prices for limited-service restaurants in California rose at a pace faster and more significant than anywhere else in the country ahead of the change. But as you’ll see, it’s been a wide umbrella.
MORE: Customers Shoulder Burden of California’s Fast-Food Wage Spike
To exclude one-off price hikes or special menu introductions, the analysis considered items that returned to a menu in the months prior to the law’s enactment (September 28, 2023) and effective date (April 1).
Here were some takeaways:
California led the nation in menu price inflation in the period leading up to the wage increase enactment. Menu price inflation in the quick-service category was 7 percent.
The percentage of limited-service menu items with a price increase was higher in California than the total U.S. in all but once month from May 2023 to March 2024.
In the six months leading up, all of California’s 30 area codes were in the top 30 percent of the highest quick-service price inflation area codes across America.
Northern California’s 530 area code reported the highest net quick-service menu price inflation among the sector in the same six-month period (8.9 percent).
Again, speaking to the broader idea, full-service chains raised prices moderate in comparison to quick service, yet still above the national average. Net menu price inflation nationwide for full-serves in the period was 2.4 percent. It was 3.3 percent in California.
California topped the national average about half the time between May and March (six out of 11 months).
Percentage items increasing
Quick service
U.S.
- May 2023: 5.7 percent
- June 2023: 9.5 percent
- July 2023: 7.2 percent
- August 2023: 5.5 percent
- September 2023: 8.7 percent
- October 2023: 6 percent
- November 2023: 8.9 percent
- December 2023: 14.9 percent
- January 2024: 7.6 percent
- February 2024: 7 percent
- March 2024: 7 percent
California
- May 2023: 6.2 percent
- June 2023: 8.4 percent
- July 2023: 9 percent
- August 2023: 8.1 percent
- September 2023: 9 percent
- October 2023: 8.3 percent
- November 2023: 14.9 percent
- December 2023: 24.7 percent
- January 2024: 14.4 percent
- February 2024: 14.2 percent
- March 2024: 16.5 percent
Difference
- May 2023: 0.4 percent
- June 2023: –1 percent
- July 2023: 1.8 percent
- August 2023: 2.6 percent
- September 2023: 0.3 percent
- October 2023: 2.3 percent
- November 2023: 6.1 percent
- December 2023: 9.8 percent
- January 2024: 6.8 percent
- February 2024: 7.2 percent
- March 2024: 9.6 percent
Full service
U.S.
- May 2023: 4 percent
- June 2023: 6.5 percent
- July 2023: 4.8 percent
- August 2023: 2.9 percent
- September 2023: 10.2 percent
- October 2023: 10 percent
- November 2023: 2 percent
- December 2023: 5.6 percent
- January 2024: 1.9 percent
- February 2024: 5.2 percent
- March 2024: 9.1 percent
California
- May 2023: 2.2 percent
- June 2023: 3.6 percent
- July 2023: 4.6 percent
- August 2023: 3.5 percent
- September 2023: 10 percent
- October 2023: 11.8 percent
- November 2023: 2.3 percent
- December 2023: 8.5 percent
- January 2024: 6.3 percent
- February 2024: 4.4 percent
- March 2024: 12.4 percent
Difference
- May 2023: –1.8 percent
- June 2023: –2.9 percent
- July 2023: –.02 percent
- August 2023: 0.6 percent
- September 2023: –.02 percent
- October 2023: 1.8 percent
- November 2023: 0.3 percent
- December 2023: 3 percent
- January 2024: 4.4 percent
- February 2024: –0.8 percent
- March 2024: 3.3 percent
Total price increase
Quick service
U.S.
- May 2023: 0.46 percent
- June 2023: 0.82 percent
- July 2023: 0.61 percent
- August 2023: 0.93 percent
- September 2023: 0.77 percent
- October 2023: 0.70 percent
- November 2023: 0.81 percent
- December 2023: 0.95 percent
- January 2024: 1.01 percent
- February 2024: 0.49 percent
- March 2024: 0.47 percent
- Net inflation since September 2023 (six months): 4.5 percent
California
- May 2023: 0.38 percent
- June 2023: 0.56 percent
- July 2023: 0.61 percent
- August 2023: 2.17 percent
- September 2023: 0.59 percent
- October 2023: 0.76 percent
- November 2023: 1.08 percent
- December 2023: 1.47 percent
- January 2024: 1.31 percent
- February 2024: 1.06 percent
- March 2024: 1.13 percent
- Net inflation since September 2023 (six months): 7 percent
Difference
- May 2023: –0.1 percent
- June 2023: –0.3 percent
- July 2023: flat
- August 2023: 1.2 percent
- September 2023: –0.2 percent
- October 2023: 0.1 percent
- November 2023: 0.3 percent
- December 2023: 0.5 percent
- January 2024: 0.3 percent
- February 2024: 0.6 percent
- March 2024: 0.7 percent
- Net inflation since September 2023 (six months): 2.5 percent
Full service
U.S.
- May 2023: 0.6 percent
- June 2023: 0.6 percent
- July 2023: 0.3 percent
- August 2023: 0.2 percent
- September 2023: 1 percent
- October 2023: 0.8 percent
- November 2023: 0.2 percent
- December 2023: 0.4 percent
- January 2024: 0.1 percent
- February 2024: 0.3 percent
- March 2024: 0.5 percent
- Net inflation since September 2023 (six months): 2.4 percent
California
- May 2023: 0.53 percent
- June 2023: 0.35 percent
- July 2023: 0.27 percent
- August 2023: 0.28 percent
- September 2023: 1.29 percent
- October 2023: 0.98 percent
- November 2023: 0.17 percent
- December 2023: 0.69 percent
- January 2024: 0.43 percent
- February 2024: 0.34 percent
- March 2024: 0.69 percent
- Net inflation since September 2023 (six months): 3.3 percent
Difference
- May 2023: –0.1 percent
- June 2023: –0.2 percent
- July 2023: flat
- August 2023: flat
- September 2023: 0.3 percent
- October 2023: 0.1 percent
- November 2023: –0.1 percent
- December 2023: 0.3 percent
- January 2024: 0.3 percent
- February 2024: flat
- March 2024: 0.2 percent
- Net inflation since September 2023 (six months): 0.9 percent
For a complete breakdown of data, by area code, and more, visit here.
