Big Macs And Fine Dining: Both Cheaper In Australia Than Europe

Is it more expensive to dine out in Australia than Europe? Blogger Matt Cowgill conducted a thorough analysis of both fine dining and Big Mac costs in Australia and Europe and concluded that whether you look at basic exchange rates, purchasing power parity or how much of the average weekly wage is needed to buy one, Australia generally comes out at the cheaper end of the scale.

Picture: Getty Images

For fine dining, Cowgill used the World's Top 50 Restaurant list and examined the cost of a dinner tasting menu at each venue in Europe and Australia on that list. For the Big Mac, he grabbed the local price. Relevant local taxes were applied, and Cowgill compared the prices using three different metrics: current exchange rates, purchasing power parity exchange rates, and the proportion of an average full-time wage that would be needed to buy that meal.

No matter which metric you use, Australia came out towards the bottom end of the scale for both fine dining and Maccas. When it comes to buying a Big Mac, we were right at the bottom of the ranking when it came to how much of the minimum wage you'd have to spend to buy one, which matches up with previous research on the topic.

Cowgill's motivation for the post was a claim published in the AFR that mandatory penalty rates resulted in higher restaurant prices in Australia . In the case of restaurants, the actual costs certainly don't seem to match up with the claim, but this is a familiar theme in discussions of pay in Australia. We often hear that "excessive penalty rates" mean goods cost too much or businesses can't operate effectively.

However, as we've seen when examining similar claims from Myer CEO Bernie Brookes and Harvey Norman boss Gerry Harvey, those claims rarely stand up to any kind of close scrutiny, often involving wildly exaggerated and flat-out wrong figures.

The two lessons? Firstly, you'll need to budget more than you might spend at home for eating out if you're planning a European holiday. Secondly, when people make claims about penalty rates destroying business, they need data to back up their claims, not just anecdotes.

How expensive are Australian restaurants? [We are all dead]


Comments

    Interesting research. Would be more interesting to see the results if using a source like Urban Spoon, rather than a "top 50" list (from which there are only two Australian restaurants; quite a small sample). I doubt the top 50 are a good representation of the average restaurant, and prices would fluctuate wildly between them based on the reputation of the celebrity chef they employ, etc.

    As for taking our Australian dollars to Europe, I think our higher wages would work greatly in our favour, so perhaps PPP isn't the best judge of that?

    As for McDonalds being a benchmark, based on my very small and anecdotal sample, I think the status of McDonalds changes depending on what country you're in. Here it's seen as a low-cost, low-quality option, but in other countries it's mid-range, with small businesses offering more competitive pricing.

      In a global list, 2 Australian restaurants isn't unreasonable. As Matt explains in his post, he used an externally selected list to avoid accusations of cherry-picking. The data isn't about the "average restaurant" (whatever that is); it's quite clear that it's comparing two distinct ends of the spectrum. The point about wages is why the data based on average salaries is included.

    I'd say most countries have very reasonable prices if you keep looking. In Italy you can get a pizza big enough to feed a family for about the same price as a big mac. And the high-end stuff is really hard to say it's not an apples-to-oranges comparison (like he says) and I can think of plenty of factors that'd make the European restaurants more expensive. That said, though I'm not a huge fan of the penalty rate system (not that I know there's a better one, it just seems to have more negative than positive in some situations), I wouldn't say they'd be the main factor in restaurant pricing.

    Why in a metric country, do we have a 1/4lb burger?
    And does that refer to the weight gain from eating one?

    I'd certainly believe the McDonalds one. I thought they'd made a mistake when I ordered a small Big Mac meal and a donut in Zurich and they asked me for 15CHF.

    Really? Fish N Chips is now regularly sold for $25 in Aussie pubs, Parmas the same. Mains around the $30 are seen as normal. In London you'd pay no more than £10 for a pub meal. Plus what about drink? Australia has to be one of the most expensive places in the world to buy beer. $9 for a pint of Carlton is now normal and if you want a fancy foreign beer (but one that is still brewed here) you're looking at $14!!! That's £8 for a pint. wtf

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