Fast-food chains hit by rising beef prices
NEW YORK — Rising beef prices might not mean the cost of a Whopper is going to skyrocket, but it could mean you’ll be encouraged to order a chicken sandwich instead.
Beef prices have climbed in part because of rising demand overseas and droughts in recent years that have caused livestock producers to shrink their cattle herds. The average, year-to-date price for 81 percent lean ground beef is $2.18 per pound, said Kevin Good, an analyst at CattleFax, a Colorado-based tracker of the beef industry. That’s up 24 percent from a year ago.
The soaring prices have hurt fast-food restaurants that feature beef as the centerpiece of their menus: Burger King, Wendy’s and McDonald’s — the nation’s three biggest burger chains — all say they’re dealing with higher beef costs.
But fast-food chains, which sometimes pass along additional costs for ingredients to customers, realize there’s only so much people are willing to pay for a burger. So, they’re taking other measures to help ease the pressure, such as slashing expenses elsewhere or trying to get people to order other things on their menus.
Arby’s, a chain best known for its roast beef sandwiches, next week is rolling out a new line of steak sandwiches. But without providing details, CEO Paul Brown said the company is also looking for “more opportunities” to promote chicken, which on average accounts for about 10 percent of sales for the chain.
“There are certain things you can do, which is promote different items,” Brown said when asked how the company is dealing with rising beef costs.