Menu price inflation hit a 39-year high in November as skyrocketing labor and food costs led restaurants across the country to increase their fees for customers.
The out-of-home food index rose 0.6% in November and 5.8% in the same period a year ago, the US Bureau of Labor Statistics said on Friday. This is the highest annual rate of increase in this index since 1982.
And even that underestimates how much restaurant inflation actually exists, as the index includes food prices in schools which have fallen 45% in the past year.
Prices at limited-service restaurants, the hardest hit by the labor shortage, have increased 7.9% in the past year.
Prices for full-service meals are up 6% from a year ago.
Inflation in restaurants is due to a combination of factors, namely a labor shortage which has resulted in a dramatic increase in wages. According to Technomic, sister company of Restaurant Business, wages rose 14% this year, nearly three times the headline inflation rate.
In addition, labor issues cause major disruptions in the supply chain, making it difficult for meat processors to have enough staff to produce chicken or beef and leaves distributors without enough. drivers to deliver goods to restaurants.
The producer price index rose 10.5% in October, a real improvement from the 13% increase recorded in September. Yet the prices of many restaurant ingredients remain high: Cooking oils are up 39%, said Joe Pawlak, chief executive of Technomic. Chicken increased 36% and beef 41%.
This level of menu price inflation generally pushes consumers away from restaurants. But the prices of the grocery store are not much better. Home food inflation rose 6.4% year-on-year and has exceeded restaurant inflation for each of the past three months.
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