The Food Delivery Big Mac Index: Burger Inflation in 2022}

The Food Delivery Big Mac Index: Burger Inflation in 2022

Introduced in 1967 by a McDonald’s franchise owner Jim Delligati, the Big Mac today can be purchased in over 100 countries. Despite not being confirmed by McDonald’s, an estimated 900 million Big Macs are sold yearly around the globe, which means that an average of more than 2.4 million sold daily [1]. While you are enjoying the same tasty ingredients, the cost of a burger varies depending on which part of the world you are in, as evidenced by the Big Mac Index.

The Big Mac Index was invented by The Economist in 1986 as a lighthearted guide to demonstrate the concept of purchasing power parity [2]. Although it is not a precise gauge of currency alignment, it helps illustrate the idea that the market exchange rates could be at an “incorrect” level when compared to the cost of buying the same basket of goods or services in two countries. Big mac has the advantages of having widespread availability and the same inputs and distribution system globally [3]. Comparing the prices of the burger in two countries, the index can give an indication as to whether a currency may be over or undervalued [4].

Beyond being a tool that makes exchange-rate theory more digestible, the Big Mac index also shows inflation in burger prices over time. By converting all Big Mac prices into the same currency, it also indicates the differences in burger cost around the world that shed light on the cost of renting space and equipment, labour, and other factors. By leveraging Dashmote’s data analytics platform, we tracked prices of Big Mac’s on food delivery platforms in 35 countries across three quarters in 2022. In this article, we give insights into both relative prices and price trends of Big Mac around the globe.

Big Mac Index global overview

According to Dashmote’s ‘Food Delivery Big Mac Index’ data, there are no food delivery pricing guidelines for McDonald’s franchisees. In France, the prices of a Big Mac are the most diverse, which varies from US$5.4 to US$8.9.

Switzerland has the priciest burger at a cost of US$7.4, followed by Norway at US$7.0. Both countries are in Northern Europe where both living costs and wages are relatively high compared to other parts of the world. Considering that a Big Mac averagely costs 7.35 francs on food delivery in Switzerland, the USD/CHF rate expressed in the Big Mac Index terms should be 1.23 francs per dollar. However, the value of this pair is currently quoted around 1.01 in Forex, which makes the Swiss currency overvalued by the market by 21.8%.

Unsurprisingly, India has the cheapest Big Mac at US$2, making Indian Rupee the most undervalued currency in the above listed countries according to the Big Mac Index. It’s important to note that Big Macs in India are made of chicken patties instead of beef, which makes it less comparable to other countries. However, having a Big Mac that only costs ⅓ of it in the USA still indicates the low-wage labour market in India.

A Big Mac on Indonesian food delivery costs US$2.3 on average, indicating the undervalue nature of Indonesian rupiah. An Indonesian tourist ordering food when visiting the USA will be paying more than double the price for the same Big Mac back home.

YTD growth on Food Delivery

Turkey has seen the largest jump in burger prices, with the cost of a Big Mac climbing over 60% since the beginning of 2022. The annual inflation rate in Turkey rose further to 85.5% in October 2022, from 83.5% in the previous month [5]. This highest inflation rate since June of 1998 explains the large price swings for a Big Mac in Turkey in 2022.

The price of Big Macs on food delivery in Greece also grew significantly from US$3.8 in Q1 2022 to US$4.9 in Q3, with a 30% increase. The following is Turkey (+18%), and eastern European countries Poland and Hungary (+11%). The delivery price of a Big Mac grew the least in Switzerland (+0%) and United Arab Emirates (+1%).

The ‘Food Delivery Big Mac index’ offers global organisations a good perspective to take into consideration when making their go-to-market pricing strategies. For example, a Dutch organisation might decide that they can sell their product at a higher price in countries with an overvalued currency, such as Switzerland and Norway. Among similar lines, a company can sell a product at a lower price in countries with an undervalued exchange rate, like India, but potentially at a larger quantity. By giving insights on purchasing power parity, labour costs, inflation and so on, the Big Mac Index simplifies the complex economic theory through the price of a burger.

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 analyse publicly available data to contribute to making strategic decisions for your brand. Do you find the ‘Food Delivery Big Mac Index’ interesting? Do you want to know more about retrieving more market insights across food delivery and F&B?

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