In a surprising twist in the fast-food industry, In-N-Out Burger, led by President Lynsi Snyder, has declared a firm stance against substantial price hikes in response to California’s new minimum wage law. This announcement comes at a time when competitors like McDonald’s and Chipotle are adjusting their pricing strategies to absorb the increased labor costs.
In-N-Out: A Commitment to Affordability
During a candid interview with NBC’s TODAY, Lynsi Snyder outlined In-N-Out’s commitment to maintaining affordable prices for their customers, despite the implementation of the Fast Act, which raised the minimum wage for fast food workers in California to $20 per hour.
“I was sitting in VP meetings going toe-to-toe saying, ‘We can’t raise the prices that much, we can’t,'” Snyder explained, highlighting her dedication to consumer affordability.
Unlike some of its competitors, In-N-Out has only made minimal adjustments to its pricing. A Los Angeles-based location of the chain reportedly increased the price of a burger by a mere 25 cents and that of a drink by just 5 cents, according to the New York Post.
This restrained approach marks a stark contrast to the broader industry trend of significant price increments.
Staying True to Its Roots
Snyder’s approach isn’t just about prices. She also affirmed the company’s strategy to stay private and avoid franchising, focusing on a quality customer service experience that could be compromised by the impersonality of mobile ordering options.
This decision underscores In-N-Out’s commitment to maintaining its unique brand identity and close customer relations, setting it apart in a rapidly evolving fast-food landscape.
In-N-Out makes price pledge with California minimum wage law, as others raise rates, slash staff https://t.co/jCr23yvf6F
— Unions=Power&Step Up (@CBAStepUp) April 13, 2024
Industry-Wide Repercussions
The broader implications of California’s wage increase have been felt across the industry. McDonald’s CEO Chris Kempczinski revealed in a conference call that the company anticipates a short-term financial impact on franchisee cash flow due to these wage adjustments.
Similarly, Chipotle’s Chief Financial Officer, Jack Hartung, indicated a potential increase in prices by a “mid-to-high single-digit” percentage.
Even more drastic measures have been observed among Pizza Hut operators in the state, with announcements of over 1,200 delivery driver layoffs as a preemptive measure before the Fast Act’s implementation, as reported by Business Insider.
In Summary
In-N-Out’s bold stance in the face of industry-wide upheavals serves as a testament to its enduring commitment to customer satisfaction and operational consistency.
By prioritizing affordability and quality service over aggressive cost-cutting and pricing strategies, In-N-Out not only stands out from its competitors but also reinforces its reputation as a customer-focused brand.
This strategy may well influence other players in the fast-food industry to reconsider their approach to economic changes and customer relations.
