Markets

Fast food companies are seeing rising costs from two sides

By James Dennin for Kapitall

Food prices are going up . But that's not the only problem facing the fast food industry as protests over low wages and working conditions start to spread overseas .

Reports of fast food protests are springing up as far away as Nigeria and Japan. Many of the protests were inspired by American complaints over income inequality, with workers demanding a $15 federal minimum wage.

That would be double the current minimum of $7.25 an hour.

Increasing the pressure are rising food costs that have resulted from irregular weather. Beef prices in particular have climbed, but so too have avocados-a major problem for extremely popular fast-casual Mexican eateries like Chipotle ( CMG ) and Qdoba ( JACK ) .

This is prompting firms across the industry to raise prices. Chipotle is doing so for the first time in years. So is McDonald's ( MCD ) . And Starbucks ( SBUX ) is trying to turn itself into a bar as a way to continue selling to people after they get their morning caffeine fix.

Even Pepsi ( PEP ) is raising prices on its beverages. Part of this certainly has to do with a strengthening economy, where people have more money to spend. But it also begs the question of how much we're willing to pay for our favorite indulgences.

Will these giant fast food companies with rising costs be able to keep customers coming back for more? Use the list below to begin your analysis and let us know what you think in the comments.

Click on the interactive chart to view data over time.

1. Chipotle Mexican Grill, Inc. ( CMG , Earnings , Analysts , Financials ): Develops and operates fast-casual, fresh Mexican food restaurants in the United States. Market cap at $15.38B, most recent closing price at $504.32.

2. McDonald's Corp. ( MCD , Earnings , Analysts , Financials ): Operates as a foodservice retailer worldwide. Market cap at $101.54B, most recent closing price at $103.03.

3. Pepsico, Inc. ( PEP , Earnings , Analysts , Financials ): Engages in the manufacture, marketing, and sale of foods, snacks, and carbonated and non-carbonated beverages worldwide. Market cap at $130.65B, most recent closing price at $86.84.

4. Jack in the Box Inc. ( JACK , Earnings , Analysts , Financials ): Operates as a restaurant company that operates and franchises Jack in the Box restaurants. Market cap at $2.29B, most recent closing price at $54.01.

Owns Qdoba.

5. Starbucks Corporation ( SBUX , Earnings , Analysts , Financials ): Operates approximately 16,858 stores, including 8,833 company-operated stores and 8,025 licensed stores. Market cap at $52.38B, most recent closing price at $70.17.

(List compiled by James Dennin. Monthly returns sourced from Zacks investment Research.)

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

Kapitall Wire is a division of New Kapitall Holdings, LLC. Kapitall Generation, LLC is a wholly owned subsidiary of New Kapitall Holdings, LLC. Kapitall Wire offers free investing ideas, intended for educational information purposes only. It should not be construed as an offer to buy or sell securities, or any other product or service provided by New Kapitall Holdings, LLC, and its affiliate companies.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Stocks