Menu Price Increases Continue To Outpace Grocery Prices

The disparity between price gains at grocery stores and restaurants continued to increase in March, according to data from the Bureau of Labor Statistics’ Consumer Price Index, released April 16. Prices for food-at-home fell 0.1 point in March, while those for food-away-from-home rose 0.2% in the month.  For the past 12 months, grocery store prices have risen only 1%, while menu prices have gained 2.3%.

Menu price gains have outpaced those at retail outlets since January. The overall CPI dropped 0.2% in March, thanks to a 3.1% drop in gasoline prices. For the past 12 months, the CPI has risen only 1.5% before seasonable adjustment.

Menu price changes generally lag those at grocery stores, as the lead times for such changes are months longer. Grocery stores are responding to a recent downturn in food prices, while foodservice outlets planned increases last fall when prices were surging. Wholesale food price gains for key proteins such as beef, poultry and dairy products last fall continues to lead to higher menu prices. Restaurants also have a higher mix of proteins than food-at-home.

As we reported last Fortnightly, overall wholesale food prices at all three stages of processing rose 0.2% in March, following a half-point decline in February.