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.
Alex Macedo, president of Burger King’s North American region, also said earlier this year the company is pushing chicken more aggressively to offset rising beef costs. This summer, the chain said it brought back its “Chicken Fries,” which are deep-fried pieces of chicken in the shape of french fries, after “ongoing guest outcries reached a point where they could no longer be ignored.”
Burger King’s website is also currently promoting its Italian Original Chicken Sandwich, as well as a deal for 10 chicken nuggets for $1.49.
Burger King is working with franchisees to reduce restaurant costs as well. Carrols Restaurant Group, Burger King’s biggest U.S. franchisee, noted that its beef costs were up 32 percent in the latest quarter from a year ago.
Wendy’s on Thursday also announced a plan to cut costs by $30 million to offset challenges, which include rising beef costs. Spokesman Bob Bertini said “our varied core menu with many chicken and salad options gives us options.”
To drive customer traffic in the U.S., McDonald’s said it’s working to keep prices down despite its rising costs for ingredients. To counter pressures, which include weak sales, McDonald’s Chief Financial Officer Pete Bensen said the company is working with third-party experts to analyze its cost structure, including staffing levels.
