Five Guys, the popular fast food chain known for its burgers and fries, has long puzzled customers with its relatively high prices. Now, author and behavioural science expert Rory Sutherland has offered an explanation in a TikTok video, suggesting the chain's pricing strategy is based on a 'hero product' model.
Sutherland explains that while a burger and shake at Five Guys can cost up to £12, customers actually get better value than it seems. 'You get free drinks refills, you get an extra scoop of fries for free, you get free peanuts. All the toppings on the burger are entirely free, regardless of how many of them you want,' he says.
The key, according to Sutherland, is that Five Guys charges a premium for its 'hero products'—items where customers believe price directly affects quality—while keeping other offerings competitively priced. 'If you have a hero product, you can charge massively in an area where people think money makes a real difference provided you're remarkably ungreedy everywhere else,' he adds.
Five Guys CEO Jerry Murrell has previously explained the company's pricing structure, stating that prices fluctuate based on food costs. 'We raise our prices to reflect whatever our food costs are. So, if the mayonnaise guy triples his price, we pay triple for the mayonnaise! And then we'll increase the price of our product,' Murrell said.
The chain also prides itself on using fresh ingredients, with meat from a speciality supplier and chips cooked in peanut oil, which can be expensive. This commitment to quality, combined with the pricing strategy, allows Five Guys to justify its higher prices in a market dominated by cheaper fast food options.
