Restaurant menu

Restaurant menu price inflation rises to another level

Restaurant menu prices hit another 40-year high in June as consumers’ wallets continue to come under pressure.

The index for food eaten outside the home rose 7.7% year over year, the largest 12-month increase since the period ending in November 1981, according to the Bureau of Labor Statistics . Prices for full-service meals increased by 8.9% while quick-service menus increased by 7.4%. Here’s how inflation has evolved over the past few months:

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%

February

  • Index of food away from home: 6.8%
  • Quick service menu price: 8%
  • Full-service menu price: 7.5%

March

  • Food outside the home index: 6.9%
  • Quick service menu price: 7.2%
  • Full-service menu price: 8%

April

  • Index of food outside the home: 7.2%
  • Quick service menu price: 7%
  • Full-service menu price: 8.7%

May

  • Food outside the home index: 7.4%
  • Quick service menu price: 7.3%
  • Full-service menu price: 9%

Headline inflation in the United States was 9.1%, beating the Dow Jones estimate of 8.8%. In May, it was 8.6%.

Firehouse Subs CEO Don Fox found that restaurants were operating at the fourth highest rate of inflation in modern US history. He noted that current rates are similar to what happened in 1973, when inflation rose from 5.5% in May to 8.7% seven months. later. At present, the United States reached 5.4% in June 2021 and, a year later, finds itself at 9.1%. During this cycle almost 50 years ago, inflation reached 12.3% in December 1974 and did not fall below 10% until May 1975.

“The restaurant industry is currently facing a number of challenges, many of which are either direct results of the pandemic or heavily influenced by it,” Fox said in its monthly RSQ magazine column. “But I dare say that the current rate of inflation and its dual impact on the consumer’s wallet and the foodservice operator’s input costs are high on the list of challenges for many operators. Staffing issues are perhaps the only contender for the top spot.”

According to the US Census Bureau, food services and drinking places earned $84.98 billion in May, an increase of just 0.7% from April. Chip West, a retail and consumer behavior expert at marketing solutions firm Vericast, said the slow sales were directly linked to rising menu and gas prices.

Former Snapchat builder and third-generation restorer Dante DiCicco said RSQ a recession is approaching. He pointed to a recent report from Morgan Stanley showing that the probability of a recession on most econometric models has risen from 30% to 60%. He also predicts that rising menu prices will begin to impact consumer restaurant spending, calling it “a simple equation of supply and demand.”

However, consumers may continue to eat out due to what is happening in other food and beverage sources. Food prices rose 12.2% in June year-on-year, the biggest 12-month jump since the period ending April 1979. The butter and margarine index rose by 26.3%, while fruits and vegetables increased by 8.1% and cereals and bakery products increased by 13.8%. percent.


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