Big Mac Around the World: A Flavourful Journey Into Economics}

Big Mac Around the World: A Flavourful Journey Into Economics

When savoring a Big Mac, one may not realize its potential as a tool for understanding global economics. In a previous article, we introduced the Food Delivery Big Mac Index, which monitored Big Mac prices on food delivery platforms across 35 countries for three quarters in 2022. This index helps us comprehend variations in purchasing power, currency value, and inflation. Building on this topic, in this new article, we focus on the last quarter of 2022 and the first quarter of 2023, analyzing how Big Mac prices have evolved worldwide. Our analysis uncovers interesting trends among countries and discusses the implications of these patterns for the food and beverage industry. To provide a comprehensive perspective on global prices and their economic relevance, we compare our findings with The Economist's Big Mac research.

Why the Big Mac Index?

In our previous article, we mentioned that the Big Mac is great for comparisons because it's widely available and consistent worldwide [1]. The index can help us understand currency values by comparing burgers in two countries, showing if a currency might be over or undervalued [2]. The Big Mac Index not only simplifies the concept of exchange rates but also shows how burger prices change over time, revealing inflation. By converting all Big Mac prices into a single currency, the index emphasizes cost differences around the world, giving insights into costs like rent, equipment, labor, and other factors. 

Why is this important for those in the food and beverage industry? The Big Mac Index is relevant because it helps global companies develop pricing strategies, enabling them to adjust prices based on currency values. For example, a company may decide to charge a higher price for their product in a country with an overvalued currency, like Switzerland, compared to a country with a lower currency value, such as Indonesia.

Big Mac Prices: A Tale of Two Extremes

Our data showed that in Q1 2023 the maximum price of a Big Mac in France is around €8.8 ($9.66), making it one of the most expensive, while in Indonesia, the same burger is only IDR 37,130 ($2.48). This big difference shows the variety in economic conditions and buying power in different countries. The average Big Mac price worldwide is around $5.43, with prices varying greatly among countries, reflecting various factors like local production costs, taxes, and consumers' willingness to pay. This information emphasizes the importance of understanding the economic landscape when studying Big Mac prices worldwide.

Tracking the Growth of Big Mac Prices Worldwide

Poland saw a significant 66.85% increase from Q1 2022 to Q1 2023. Its non-Euro currency, the Polish zloty, reached record lows against the euro and dollar in 2022 [3] and factors like the war in Ukraine and a deteriorating economy contributed to currency fluctuations. Turkey's Big Mac price jumped by a huge 154.63% during this time, reflecting worries about inflation and economic stability in the country. France, which already had high Big Mac prices, experienced a 24.51% increase from €7.10 in Q1 2022 to €8.84 in Q1 2023. This could mean the French economy is growing as prices usually go up when the demand for goods and services increases. 

Norway, also known for high Big Mac prices, had a 21.99% increase from $6.30 in Q1 2022 to $7.61 in Q1 2023. This might indicate economic growth in Norway and a higher willingness to spend on fast food. However, since Norway had one of the highest Big Mac prices in Q1 2022, the increase could also be due to other factors, like changes in taxes or ingredient costs. 
In contrast, Brazil and South Africa showed negative growth rates of -1.30% and -4.81%, signaling unique economic situations. The fast food industry has grown recently in both countries  [4,5]. In Brazil, this growth is driven by a rising middle class with more disposable income. Meanwhile, South Africa's competitive hospitality sector, the largest food service market in Africa, is expected to grow despite economic challenges. The growing demand for diverse fast food options has boosted the industry in both countries.

Food Delivery Big Mac Index as of Q1 2023

Comparing Our Findings with The Economist's Big Mac Research

What does The Economist [6] think about all this? They've also been tracking Big Mac prices and believe that the cost of the burger reflects wider inflation trends. Our findings match their observation that the average price of a Big Mac in the US has gone up more than 6% to $5.36 over the past two years. However, we discovered that some countries like France, Poland, and Turkey have seen even bigger price increases. This interesting Big Mac story highlights the need to understand global prices and their effects on the food and beverage industry.

For professionals in the food and beverage industry, knowing these global price trends is essential. The Big Mac Index is an easy and engaging way to compare costs across countries, helping businesses make smart decisions in a complicated economic world. The data on Big Mac price changes from Q1 2022 to Q1 2023 provides valuable insights into economic health, consumer preferences, and more, allowing industry stakeholders to make well-informed decisions regarding pricing, marketing, and other aspects of their business.

Who are we as Dashmote?

Dashmote is the leading big data and AI analytics company in the food & beverage industry. We help F&B enterprises by empowering leaders and analysts to track and analyze publicly available data to contribute to making strategic decisions for your brand. Want to know more about retrieving market insights across food delivery and F&B?

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