This is a Number 3 from McDonald's:
a burger, fries, and a drink.
It costs $11 in New York City.
Fast food is supposed to be cheap and convenient,
but do you ever find yourself spending more
on fast food than you expected to?
You're not alone.
According to one study,
Americans spend around $1,200 on fast food every year.
Places like McDonald's and Burger King
do everything in their power to get you to spend more money,
and it turns out fast food isn't as cheap as you think.
Fast food is all about the deals.
Value meals, combos, coupons, oh my.
But the seemingly simple menu
actually hides most of the options.
Compare a fast food menu to a fine dining restaurant menu.
The restaurant menu is simple
and not very stimulating,
but the fast food menu is a noisy mess
of options and categories,
and fast food restaurants grab your attention
with bright reds or oranges
along with big appetizing photos of their food.
There's a hierarchy.
The pictures are big, but the prices are small.
They keep your attention on the items that cost more
by showing these really big on the left side
where you start reading.
You're not wondering if that burger is worth $6,
you're just looking at those big juicy patties.
Hans Taparia: Food pictures, they light up the brain,
you know, particularly when you're hungry.
Large food pictures for a food company are key.
Narrator: That's Hans Taparia.
He's a health food entrepreneur
and a professor of business and society at NYU.
Hans Taparia: The playbook has been around for awhile,
I would say since the '80s,
which has been centered around simplicity,
cheap and bold and bright.
Narrator: Fast food restaurants use other tricks too,
like not showing a dollar sign
or using a 9.79 or 0.89 pricing format.
Pretty much $10, but you still think it's $9
because you read left to right.
But what about the dollar menu, right?
Well, dollar and value menus do exist,
but they're often small
and far off to one corner where they are harder to see.
Hans Taparia: And if you buy multiple
items off the value menu,
it won't necessarily be cheaper than a Happy Meal.
So it's not necessarily less profitable for them,
but it accomplishes two things.
It keeps the consumer coming,
and it's catering to a consumer
that is increasingly poorer
in the case of these conventional fast food outlets.
Narrator: And even though fast food menus are big,
their confusing layouts make it difficult
to find exactly what you're looking for.
It's easiest to read the menu
when you're close to the counter.
But then it's time to order.
The pressure is mounting,
and you just pick that big, bright, juicy Number 3,
and that Number 3 is where the real secret of the menu lies:
the combo.
The star of the menu is the combo meal.
You can order an entree, a side, and a drink
just by saying one easy number.
It takes a lot less time to order the Number 6
than a 10-piece nugget, medium fry, and a medium drink,
but have you actually done the math
to see if that combo is saving you any money?
Take McDonald's for example.
If you buy a Number 3, it costs $10.39,
but if you were to buy the Double Quarter Pounder,
medium fry, and medium drink, it costs $10.48.
You're only saving 9 cents,
and often you'll end up with things
you didn't even want in portions
that are way bigger than what's healthy.
Hans Taparia: And creating this perception,
which is quite real actually,
that the per ounce cost of something bigger is lower,
and so I'm just getting better value for my money,
forget the fact that I'm buying 32 ounces of soda,
which has half a cup of sugar.
Narrator: The convenience of ordering
a preselected meal gives fast food restaurants control
over what you order.
Combine this with multiple size options and cheap upgrades,
and it's hard to walk away with a small in every category.
When was the last time you went to a place like Taco Bell
and just bought one taco?
Fast food restaurants make more money
from customers buying multiple items.
Items like soda have a much higher profit margin
compared to burgers,
so fast food companies do everything they can
to get you to buy a drink.
They've added things like 24-hour locations
and all-day breakfast to make sure
you can get whatever you want whenever you want it.
If you think you have more control
at an ordering kiosk, you're wrong.
According to McDonald's CEO Steve Easterbrook,
customers spend more on average at kiosks
'cause they linger longer.
Guess what those kiosks also have.
Lots and lots of pictures.
And that's just the tip of the, um, Frosty.
Fast food companies are experts
at getting customers in the door.
They advertise the most outrageous deals on signs,
posters, and TV commercials.
They can get you in the door
for some buy one get one free nuggets,
you'll probably buy a drink too.
Oh, look.
You can make that a meal
and add fries for just a dollar more.
Companies also use brand tie-ins
like Doritos Locos Tacos
and coupons that expire within the week,
like the ones you may have seen
on the bottom of your receipt,
not to mention app reward points
or special daily deals found only in the app,
just like the old-fashioned punch card.
You'll eat at a restaurant more often
if each purchase brings you closer to free food.
Any one thing in isolation itself
may not have a huge impact.
The power of marketing is when you overlay things.
Narrator: But, there's a deeper issue here.
Fast food isn't as cheap as it used to be.
According to Bloomberg,
the average price of a fast food burger
has increased by 54% in the last decade,
outpacing fast-casual and fine dining restaurants.
But fast food is sometimes the only option
in low-income food deserts,
and your environment has a big impact
on your health and weight.
Healthy fast-casual offerings
are often so much more expensive than fast food
that they no longer target the same demographic,
especially if you're feeding a family.
KFC will give you a lot more food per dollar
than an organic salad chain.
Fast food restaurants are able to lure consumers
into spending more money on large, unhealthy portions
because it's more affordable than healthier options.
Fast food can be cheap and convenient,
but you have to fight off all the psychological tricks
that are engineered to get you to spend more money.
You shouldn't be paying a premium
for low-quality, unhealthy food.