Restaurant menu

Restaurant menu price inflation continues to rise

In February, restaurant consumers were again hit by menu price inflation not seen in years.

The index for food eaten outside the home rose 6.8% from a year ago, the largest 12-month increase since December 1981. Limited-service meals rose 8 % year-over-year, while full-service menu prices increased 7.5%.

Here’s a look at the trend in menu price inflation over the past six months (year-over-year comparisons):

August

Index of food away from home: 4.7%

Quick service menu price: 6.9%

Full-service menu price: 4.9%

September

Index of food away from home: 4.7%

Quick service menu price: 6.7%

Full-service menu price: 5.2%

October

Index of food away from home: 5.3%

Quick service menu price: 7.1%

Full-service menu price: 5.9%

November

Index of food away from home: 5.8%

Quick service menu price: 7.9%

Full service menu price: 6%

December

Index of food outside the home: 6%

Quick service menu price: 8%

Full-service menu price: 6.6%

January

Index of food away from home: 6.4%

Quick service menu price: 8%

Full-service menu price: 7.1%

The price increases are unlikely to end in the next few months. Wendy’s executives recently told investors that the company’s stores were priced around 6% in the fourth quarter and expect to reach north of 5% in 2022.

“We will be monitoring value and the perception of value,” Chief Financial Officer Gunther Plosch said. “About 30%, 35% of our consumers make less than $45,000 a year, so we need to make sure we strike the right balance and maintain the perception of value.”

Meanwhile, the first quarter of Jack in the Box saw wage inflation of 10.9% and commodity inflation of 10.5%, fueled by increases in the price of beef, pork, sauces and oil. The chain took 5.5% in price year-over-year in corporate units, and chief financial officer Tim Mullany said franchisees maintained a considerable increase from the company’s price take. .

But like most brands, Mullany noted Jack hasn’t seen much pushback from consumers and has more leeway to set prices if necessary.

“We’re comfortable with the price tag we’ve taken,” he said. “We believe this is in line with inflationary headwinds on the commodity and labor side at, but we are still in line with our initial guidance of high single digit numbers.

John Rivers, CEO of Florida-based 4 Rivers Smokehouse, thinks consumer sentiment will inevitably deteriorate. His fast casual has tried to get ahead of that future by implementing a value-driven “inflation menu” that takes advantage of the falling cost of goods sold.

He doesn’t think commodity pressures will ease until at least the second half of 2022.

“Probably one of the most strategically important things a restaurateur needs to do today is to set aside six months and 12 months to start making plans and changes now,” Rivers said. “Otherwise, if you run your business from a reactionary perspective like we have for years, you’re going to get caught. Because the landslide is too steep right now.

In the United States as a whole, inflation rose 7.9% in February, setting the highest record since 1982.


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