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Big Mac helping understand cost of living pressures  

The humble burger, the Big Mac is affected by the cost-of-living crisis! But if you are a regular Mac Burger eater you already know that! 

We know from the tracking system, the Big Mac index. It measures prices across 55 countries as a way of keeping an eye on the global economy. 

You may recall back in March we presented ‘the Humble burger! A great takeaway meal or measure of Business success.https://www.blackburnaccounting.com.au/blog/218-the-humble-burger-a-great-takeaway-meal-or-measure-of-business-success. 

But, How, what’s driving up prices today 

Let’s start back in 2017 a Big Mac cost $5.80 in Australia. And year by year the price crept up in small rises reaching $6.15 in early 2019. This was prior to inflation that sent us into a cost-of-living nightmare. By 2020 prices steadily increased then the pandemic hit! 

Surprise, can you believe, with consumers stuck at home the cost dropped for the first time in years. Price stayed around $6.40 until 2022 when the cost-of-living crisis hit. Nothing was sparred, goods, essentials like toilet paper and services, plumbers, dentists, all visits started costing more! Ah yes, painful, at the dentist and checkout! 

And the humble burger didn’t escape! 

Let’s look more closely at what’s been happening. 

Across the globe this treat, with the same basic ingredients, bun, beef patties, single slice cheese, pickles, onion, lettuce and blob of sauce is produced at an industrial scale. It’s a mass-produced commodity, linked to the intricacies of the global economy. Suggested by associate professor of economists ‘if the price of a Big Mac’ is moving there’s something really strong going on in the economy at large’. And don't we know that! 

It’s basic economics 101! When McDonalds has to pay more for its ingredients it passes those costs onto consumers. With a smorgasbord of ingredients making up a Mac, including beef, special sauce, wages, rents, Royalties and intellectual property. The list goes on, nothing is spared!  

Examples, bread prices rose, cheese too, add electricity costs. With all corners of business expenses rising - It is forcing sale prices up.  

Inflation, cost of living, watch this space for more and follow the Big Mac index! 

Enjoy your Big Mac!