The Food Delivery Big Mac Index: Burger Inflation in 2022
Archived analysis. Data from 2022. First published on or before 19 April 2023.
Archived analysis of Big Mac prices on food delivery platforms across the countries in this analysis across three quarters of 2022: the priciest and cheapest markets and where burger prices rose fastest.
Later editions of the index: Big Mac Around the World: Tracking Growth and Economic Trends from 2023 and Big Mac Around the World: A Flavourful Journey Into Economics.
Introduced in 1967 by a McDonald's franchise owner, Jim Delligatti, the Big Mac can be purchased worldwide. Despite not being confirmed by McDonald's, an estimated 900 million Big Macs were sold yearly around the globe at the time, an average of about 2.5 million a day. While you enjoy the same ingredients, the cost of the 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. Although it is not a precise gauge of currency alignment, it helps illustrate the idea that 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. The Big Mac has the advantage of widespread availability and the same inputs and distribution system globally. 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.
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. Using Dashmote's data analytics platform, we tracked the prices of Big Macs on food delivery platforms across the countries in this analysis across three quarters of 2022. This article gave insights into both relative prices and price trends of the Big Mac around the globe.
Big Mac Index global overview
According to Dashmote's Food Delivery Big Mac Index data, franchisee prices varied widely. In France, the prices of a Big Mac were the most diverse, varying from US$5.4 to US$8.9.
Switzerland had the priciest burger at a cost of US$7.4, followed by Norway at US$7.0. Both are high-wage European countries, where living costs and wages are relatively high compared to other parts of the world. Considering that a Big Mac cost 7.35 francs on average on food delivery in Switzerland, the USD/CHF rate expressed in Big Mac Index terms would have been 1.23 francs per dollar. However, the pair was quoted around 1.01 at the time, which made the Swiss currency overvalued by the market by 22%.
Unsurprisingly, India had the cheapest Big Mac at US$2, making the Indian rupee the most undervalued currency among the listed countries according to the Big Mac Index. It is important to note that Big Macs in India are made with chicken patties instead of beef, which makes them less comparable to other countries. However, a Big Mac that cost only a third of the US price still indicated the low-wage labour market in India.
A Big Mac on Indonesian food delivery cost US$2.3 on average, indicating the undervalued Indonesian rupiah. An Indonesian tourist ordering food in the USA would have paid about twice the price of the same Big Mac back home.
YTD growth on food delivery
Turkey saw the largest jump in burger prices, with the cost of a Big Mac climbing sharply since the beginning of 2022. The annual inflation rate in Turkey rose to 86% in October 2022, from 84% in the previous month. That inflation rate, the highest since June 1998, explained 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, a 30% increase. In the eastern European countries Poland and Hungary, it rose by 11%. The delivery price of a Big Mac was level in Switzerland and grew the least in the United Arab Emirates (+1%).
The Food Delivery Big Mac Index offers global organisations a useful perspective when they set their go-to-market pricing strategies. For example, a Dutch organisation might decide that it can sell its product at a higher price in countries with an overvalued currency, such as Switzerland and Norway. Along similar lines, a company can sell a product at a lower price in countries with an undervalued exchange rate, like India, but potentially in larger quantities. By giving insights into purchasing power parity, labour costs, inflation and more, the Big Mac Index simplifies complex economic theory through the price of a burger.
Dashmote reads delivery menus storefront by storefront, so brands can follow prices like these market by market. See delivery price monitoring.
