Operators Boosting Menu Prices As Wholesale Food Prices Moderate

As operators dealt with rapidly rising food prices through most of last year, they were apparently plotting to get some of it back. In January, food-away-from-home prices jumped 0.4% seasonally adjusted versus December, the largest increase since August. Meanwhile, grocery-store food prices held steady in January, for the second time in the past three months.

Menu prices, up 3.1% during the past 12 months, are now higher than the overall rate of consumer price inflation, which stood at 2.9% in January, according Consumer Price Index data from the Bureau of Labor Statistics. As we reported in the last issue of FER Fortnightly, wholesale food prices fell for the third time in four months in January, though they remain 5.8% higher than a year ago.

The National Restaurant Association’s Chief Economist Bruce Grindy noted in a recent release that it is the first time in two-and-a-half years that menu price increases have exceeded 3%. And he also points out that while retail food price gains have decelerated, they remain 5.3% higher than a year ago, still more than two points higher than the menu-price increases.