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Sneaky Ways Fast Food Restaurants Get You To Spend Money - YouTube
Channel: Business Insider
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This is a Number 3 from McDonald's:
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a burger, fries, and a drink.
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It costs $11 in New York City.
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Fast food is supposed to
be cheap and convenient,
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but do you ever find
yourself spending more
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on fast food than you expected to?
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You're not alone.
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According to one study,
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Americans spend around $1,200
on fast food every year.
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Places like McDonald's and Burger King
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do everything in their power
to get you to spend more money,
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and it turns out fast food
isn't as cheap as you think.
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Fast food is all about the deals.
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Value meals, combos, coupons, oh my.
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But the seemingly simple menu
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actually hides most of the options.
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Compare a fast food menu to a
fine dining restaurant menu.
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The restaurant menu is simple
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and not very stimulating,
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but the fast food menu is a noisy mess
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of options and categories,
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and fast food restaurants
grab your attention
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with bright reds or oranges
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along with big appetizing
photos of their food.
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There's a hierarchy.
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The pictures are big,
but the prices are small.
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They keep your attention
on the items that cost more
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by showing these really
big on the left side
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where you start reading.
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You're not wondering if
that burger is worth $6,
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you're just looking at
those big juicy patties.
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Hans Taparia: Food pictures,
they light up the brain,
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you know, particularly when you're hungry.
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Large food pictures for
a food company are key.
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Narrator: That's Hans Taparia.
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He's a health food entrepreneur
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and a professor of business
and society at NYU.
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Hans Taparia: The playbook
has been around for awhile,
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I would say since the '80s,
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which has been centered around simplicity,
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cheap and bold and bright.
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Narrator: Fast food restaurants
use other tricks too,
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like not showing a dollar sign
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or using a 9.79 or 0.89 pricing format.
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Pretty much $10, but
you still think it's $9
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because you read left to right.
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But what about the dollar menu, right?
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Well, dollar and value menus do exist,
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but they're often small
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and far off to one corner
where they are harder to see.
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Hans Taparia: And if you buy multiple
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items off the value menu,
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it won't necessarily be
cheaper than a Happy Meal.
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So it's not necessarily
less profitable for them,
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but it accomplishes two things.
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It keeps the consumer coming,
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and it's catering to a consumer
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that is increasingly poorer
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in the case of these
conventional fast food outlets.
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Narrator: And even though
fast food menus are big,
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their confusing layouts make it difficult
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to find exactly what you're looking for.
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It's easiest to read the menu
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when you're close to the counter.
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But then it's time to order.
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The pressure is mounting,
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and you just pick that big,
bright, juicy Number 3,
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and that Number 3 is where the
real secret of the menu lies:
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the combo.
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The star of the menu is the combo meal.
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You can order an entree,
a side, and a drink
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just by saying one easy number.
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It takes a lot less time
to order the Number 6
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than a 10-piece nugget, medium
fry, and a medium drink,
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but have you actually done the math
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to see if that combo is
saving you any money?
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Take McDonald's for example.
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If you buy a Number 3, it costs $10.39,
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but if you were to buy the
Double Quarter Pounder,
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medium fry, and medium
drink, it costs $10.48.
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You're only saving 9 cents,
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and often you'll end up with things
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you didn't even want in portions
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that are way bigger than what's healthy.
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Hans Taparia: And
creating this perception,
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which is quite real actually,
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that the per ounce cost of
something bigger is lower,
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and so I'm just getting
better value for my money,
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forget the fact that I'm
buying 32 ounces of soda,
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which has half a cup of sugar.
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Narrator: The convenience of ordering
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a preselected meal gives
fast food restaurants control
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over what you order.
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Combine this with multiple size
options and cheap upgrades,
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and it's hard to walk away
with a small in every category.
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When was the last time you
went to a place like Taco Bell
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and just bought one taco?
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Fast food restaurants make more money
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from customers buying multiple items.
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Items like soda have a
much higher profit margin
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compared to burgers,
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so fast food companies
do everything they can
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to get you to buy a drink.
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They've added things
like 24-hour locations
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and all-day breakfast to make sure
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you can get whatever you
want whenever you want it.
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If you think you have more control
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at an ordering kiosk, you're wrong.
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According to McDonald's
CEO Steve Easterbrook,
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customers spend more on average at kiosks
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'cause they linger longer.
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Guess what those kiosks also have.
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Lots and lots of pictures.
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And that's just the
tip of the, um, Frosty.
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Fast food companies are experts
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at getting customers in the door.
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They advertise the most
outrageous deals on signs,
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posters, and TV commercials.
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They can get you in the door
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for some buy one get one free nuggets,
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you'll probably buy a drink too.
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Oh, look.
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You can make that a meal
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and add fries for just a dollar more.
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Companies also use brand tie-ins
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like Doritos Locos Tacos
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and coupons that expire within the week,
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like the ones you may have seen
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on the bottom of your receipt,
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not to mention app reward points
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or special daily deals
found only in the app,
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just like the old-fashioned punch card.
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You'll eat at a restaurant more often
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if each purchase brings
you closer to free food.
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Any one thing in isolation itself
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may not have a huge impact.
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The power of marketing is
when you overlay things.
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Narrator: But, there's
a deeper issue here.
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Fast food isn't as cheap as it used to be.
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According to Bloomberg,
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the average price of a fast food burger
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has increased by 54% in the last decade,
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outpacing fast-casual and
fine dining restaurants.
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But fast food is sometimes the only option
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in low-income food deserts,
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and your environment has a big impact
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on your health and weight.
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Healthy fast-casual offerings
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are often so much more
expensive than fast food
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that they no longer target
the same demographic,
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especially if you're feeding a family.
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KFC will give you a lot
more food per dollar
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than an organic salad chain.
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Fast food restaurants are
able to lure consumers
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into spending more money on
large, unhealthy portions
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because it's more affordable
than healthier options.
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Fast food can be cheap and convenient,
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but you have to fight off
all the psychological tricks
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that are engineered to get
you to spend more money.
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You shouldn't be paying a premium
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for low-quality, unhealthy food.
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