Inflation is profoundly impacting the U.S. restaurant industry, particularly breakfast establishments that rely heavily on staples like eggs, coffee, and flour.
The surge in ingredient costs, coupled with economic challenges, is forcing many restaurants to raise prices, adjust menus, or even close their doors.
Egg prices have seen a dramatic increase, nearly doubling since December 2024.
This spike is largely attributed to the worst avian influenza outbreak in history, which has led to the culling of tens of millions of birds to contain the spread.
Consequently, restaurants are paying significantly more for eggs, with some vendors charging up to $8 for a dozen.
Stephen Slaughter, co-owner of Philadelphia’s Green Eggs Cafe, noted that about 90% of their dishes depend on eggs, and the rising costs have substantially cut into their margins.
According to Yahoo News, Coffee prices have also reached a 47-year high, driven by climate disruptions in major producing countries like Brazil and Vietnam.
Similarly, the cost of frozen orange juice has nearly doubled since 2020 due to citrus diseases and climate shocks.
Flour prices have escalated, especially after geopolitical events such as Russia’s invasion of Ukraine in 2022.
The rising costs of these essential ingredients have led restaurants to make difficult decisions. Waffle House, for instance, implemented a $0.50-per-egg surcharge to offset the increased expenses.
Denny’s has announced plans to close up to 90 restaurants this year, citing inflation and the avian flu outbreak as significant factors.
Customers are experiencing sticker shock as menu prices rise. Denny’s popular “Lumberjack Slam” breakfast platter, once priced at $5.99, now costs $17.99, leading to frustration among patrons.
This trend reflects a broader shift, with consumers opting for more affordable dining options or choosing to eat at home.
The challenges faced by breakfast-centric restaurants are indicative of a larger trend affecting the casual dining sector.
Major chains like Red Lobster, TGI Fridays, and Buca di Beppo have filed for bankruptcy, while others like Denny’s and Applebee’s are closing numerous locations.
Inflation and shifts in consumer preferences, heightened by the pandemic, have driven many to opt for cheaper, quick-service meals or high-end dining experiences.
As inflation continues to affect the cost of essential ingredients, restaurants are striving to balance operational costs with customer expectations.
The future of many establishments depends on their ability to adapt to these economic pressures while maintaining affordability and quality for their patrons.
