Prices at various restaurants have recently risen, with some places set to raise them within the next month. The latest Bureau of Labor data shows away-from-home food prices rose 6.4%, the largest 12-month increase since 1982. In the same period, limited-service meals rose 8% and full-service meals rose 7.1%.
The inflated prices reflect a business’s need to offset its inflated costs. Food businesses are feeling the pinch of higher food and labor costs and the higher prices are a mark of just trying to survive.
Already, we’ve seen Starbucks increase their prices twice in two months, October 2021 and this past January. They have plans to raise them again in the coming months.
Wingstop raised prices in November of 2021 by 5%. That brought the total price hike to 10% for the year. That contrasts with Wingstop’s norm of 1% or 2% a year.
Cheesecake factory raised prices 3.25% this month, bringing the total year-over-year price increases to 4.75%. It may not seem like much, but that means that a $20 menu item in February 2021 now costs $20.95. Nearly a dollar.
Outback steakhouse has a 5% increase planned. That follows a 3% increase at the end of November 2021.
McDonald’s, a company with enormous pricing power, had prices 6% higher in 2021 than in 2020. So far, that pricing power has come in handy: customers have not seemed to care.
These increases are likely to stick. It isn’t often that prices come down once consumers have agreed to pay them. In all the above cases, business was not hurt by such a move, and in some cases, sales improved.