As food prices continue to climb, restaurants across the country will charge Americans more for a meal away from home.
Data from the U.S. Labor Department indicates an across-the-board jump in the cost of products, which increased 4.2% over the past 12 months — the largest increase since 2008.
By May of 2021, the price for food away from home increased by 4%. Limited-service meals were 6.1% more expensive and the price for full-service meals was up by 4.1% from the year before, the Labor Department reported.
Data also found that eating at home will not necessarily help Americans avoid the increased expense.
“All of the six major grocery store food group indexes increased over the period, “ the Dec.10 report found. “The index for meats, poultry, fish, and eggs increased 12.8 percent, with the index for beef rising 20.9 percent. The index for dairy and related products posted the smallest increase, rising 1.6 percent over the last 12 months. The remaining major grocery store food group indexes posted increases ranging from 4.0 percent (fruits and vegetables) to 5.7 percent (other food at home).”
As a result, restaurants and chains across the country have increased their prices to keep up with their costs.
Chipotle Mexican Grill increased the price of almost all of its items by nearly 4%.
While on a December conference call hosted by Baird, Chipotle’s Chief Finacial officer Jack Hartung said, “There are some inflation pressures that we’re all feeling, the whole industry is feeling, even outside our industry is feeling — right now it’s on labor.”
The Mexican food chain — which has 2,800 locations nationwide — increased its hurley pay to $15 an hour last month for 100,000 employees.
Burger chain Shake Shack raised prices during the final months of 2021 due to inflation. Customers paid between 3% and 3.5% more for their food during the final quarter.
“In December of last year, Shake Shack raised its prices two percent, which was followed by a ten percent increase this past spring,” noted Breitbart. “In February, the burger chain increased its delivery prices via third-party apps by five percent.”
Over the summer, coffee chain Dunkin’ raised prices by approximately 8%. The company has struggled to retain workers throughout the pandemic, according to EatThis.com.
Consumer prices, which reflected the “largest annual gain since 1982” as of November. are “posing a political nightmare for President Joe Biden’s administration and cementing expectations for the Federal Reserve to start raising interest rates next year,” per Reuters.
Because of the pandemic’s impact on consumer behavior, half of all limited-service restaurants became a “distress business” during 2020, according to AlixPartners. Ultimately the restaurant industry lost $240 billion dollars because of restrictions implemented in the wake of COVID-19.
Despite rising costs, restaurant spending is expected to be profitable during the holiday season. About 84% of restaurant operators say they “expect to meet or exceed pre-pandemic sales levels during this timeframe” and 46% believe they will “return to pre-COVID-19 sales levels during the holidays, while 38% said they expect to exceed pre-COVID-19 levels,” per Restaurant Dive.
