The phrase "cheap as chips" has lost its meaning in 2026. What was once an affordable filler at the local pub or takeaway has become a surprisingly expensive item, with fine dining establishments charging up to twenty dollars for a side order, and even casual venues pushing ten to twelve dollars for the basic version.
The numbers tell the story. At Rockpool Bar & Grill in Sydney, a side of hand-cut chips costs eighteen dollars today. Eight years ago, the same dish cost ten dollars. At Donovan's in St Kilda, Melbourne, prices have climbed from thirteen dollars to nineteen-fifty over six years, a fifty per cent increase. Most dramatic of all, Merivale restaurant Mimi's in Coogee charges twenty dollars, breaking what Good Food Guide editor Callan Boys calls a price barrier that others were waiting to breach. "I suspect restaurateurs everywhere have been waiting for someone to break the twenty dollar chip barrier, like when Quay's main courses tipped fifty dollars in the late nineties and provided a green light for other fine-diners to raise their prices," Boys said.
But this isn't just about luxury restaurants marking up a simple product. The cost pressures are real and widespread. Meals out and takeaway food prices rose 3.9% in the year to January 2026, according to the Australian Bureau of Statistics. McDonald's chips now exceed four dollars. Frozen chips at Coles and Woolworths average around four-eighty. At fish and chip shops, a minimum serving costs about six-fifty, while pubs typically charge between ten and twelve dollars.
The supply chain has tightened from the farm onwards. Potato farmers in NSW and Victoria report that fertiliser and fuel costs have more than doubled over recent years, squeezing their capacity to absorb price rises. "All that's more than doubled," says Jon Hill of Hill Family Farming in the Southern Highlands. "But what we're getting paid doesn't cover it. We're not making enough out of it, it's only an existence." Richard Hawkes of Hawkes Farm on Victoria's Mornington Peninsula describes the situation bleakly: the middlemen are the ones profiting, while contract prices for large volume buyers have stayed static despite climbing production costs.
Labour is another factor. At Northern Soul Chip Shop in St Kilda, co-owner Joe Grimshaw notes the eighteen per cent increase in minimum award wages since the business opened in 2020. Combined with the cost of specialist machinery and the time required for proper chip making, the economics have shifted sharply. "We try to do this one thing as best as we possibly can," Grimshaw said. "We have to charge what we feel it's worth, and that's more because of all the labour." At one-hatted restaurants, some have absorbed cost pressure by freezing their own fries for consistency and affordability, while others hand-cut and justify higher prices by pointing to the hours of preparation involved.
There is a case for restaurants raising prices. The RBA confirms rising electricity and labour costs have contributed to inflation pressures, and business owners cannot indefinitely absorb costs that cut into already narrow margins. Executive chef Mark Best at Infinity by Mark Best explains the calculation: "The price reflects the labour involved, the cost of the ingredients including the tallow, the level of the menu they sit within, and the broader operating costs of the restaurant." When potatoes are hand-selected from seasonal suppliers and fried in wagyu tallow, the production method itself commands a higher bill.
Yet there is also genuine risk in this equation. Good Food Guide editor Boys raised a real concern: some restaurants could simply charge premium prices for frozen, bulk-buy shoestring fries, counting on customers not to know the difference. "It's one of the reasons the steakhouse model has become so popular," he suggested. "The big money is made on the sides and booze." Without transparency or visible justification, price rises risk becoming pure margin extraction.
The broader pattern reflects a squeeze on both sides of the transaction. Consumers see menus rising across the board while wages stagnate. Farmers receive contract prices that haven't moved while their input costs have doubled. Restaurants operate on compressed margins while facing customer resistance to price increases. Nobody has much pricing power except, perhaps, the large supermarket chains and corporate hospitality groups that can absorb costs through scale.
The question facing Australians is not whether chip prices will rise, but whether the rise reflects real production costs or serves as cover for margin expansion. Competition authorities have been tracking hospitality pricing closely. Restaurants that communicate their cost pressures honestly are more likely to retain customer trust than those that simply pass through price rises without explanation. For consumers, the uncomfortable truth is that truly cheap chips may no longer be viable, not because of arbitrary profit-taking, but because the genuine cost of producing them has shifted. The challenge now is distinguishing between justified cost recovery and unjustified price gouging—and doing so transparently enough that the market can respond accordingly.