Bad news for American consumers: It’s getting more expensive to dine out, and it’s getting more expensive to eat at home. Restaurant prices spiked 5.8% over the 12 months ending in November without seasonal adjustments, the Bureau of Labor Statistics said Friday.
That’s the largest 12-month increase since the year ended January 1982. And unfortunately for those hoping to curb spending by turning to home cooking, grocery prices are also at record highs: They jumped 6.4%, the largest 12-month increase since December 2008.
Beef had the most dramatic increase with a 20.9% spike in prices. The sharp increases underscore the fact that restaurants and food makers are not immune to supply chain and labor pressures contributing to pricing increases across the board. Yet they’ve found customers are willing to spend more.
In fact, restaurants have been raising prices as their own food and labor costs rise, and so far, they say, consumers have accepted the hikes. McDonald’s (MCD) said in October that it expects menu prices to be about 6% higher this year compared to last.
The increase “has been pretty well received by customers,” CEO Chris Kempczinski said during an October analyst call. Chipotle also raised prices this year, yet it has seen its same-store restaurant sales grow.
Beyond restaurants, food manufacturers and grocers have faced higher costs for commodities, labor and transportation. Those costs have escalated further in recent months, leading manufacturers to pass some of them on to their retail customers — who in turn charge consumers a portion of those increases. READ MORE
