How Fast Are Restaurant Prices Rising in 2022?
Nov 29, 2022
Even infrequent diners have noticed restaurant prices rising in 2022. Record inflation boosted the cost of just about everything in foodservice, from proteins to paper goods. Coupled with upward pressure on wages, restaurant operators have had little choice but to pass these costs on to patrons in menu price increases.
But just how fast are restaurant prices rising? And how does your operation compare?
Menu price increases: limited-service restaurants vs. full-service restaurants
By the end of 2021, menu prices were already on their way up, with QSR leading the way with a 7.1% year over year increase. This growth peaked at the beginning of 2022 at 8%, and by September, had decelerated to a rise of 7.1% year over year.1
Full-service restaurant menu-price inflation has taken a different arc, rising more slowly than QSR prices in the fall of 2021 and then surpassing them by the following spring, with a peak of 9.0% in May. As of September 2022, full-service menu prices were still 8.8% ahead of the year before.1
Are rising restaurant prices beginning to moderate?
In a word, yes. Menu price inflation year over year for QSR has held steady at around 9% since May, and the rate of price growth for full-service restaurants has been declining since June.1 So, while restaurant prices are still rising, the rate of their increase is slowing.
In addition, a Bureau of Labor Statistics report released in November revealed that overall inflation had fallen to 7.7% year over year, the lowest since January 2022.2 While it’s too soon to tell if this is the start of a trend, it’s still an encouraging sign.
Restaurant traffic is down, but check averages are up
Meanwhile, major chain restaurant traffic has been trending downward since spring across all segments, most notably, casual dining. Here’s a snapshot of the declines (year over year) in the third quarter.
Major Chain Q3 2022 Traffic vs. Q3 20213
Traditional QSR: -0.6%
Fast Casual: -3.2%
Casual Dining: -8.1%
But, due to higher menu prices, average check sizes are up across the board.
Major Chain Q3 Check Average vs. Q3 20213
Traditional QSR: +5.1%
Fast Casual: +5.0%
Casual Dining: +6.6%
How chain restaurant customers are responding to higher menu prices
Overall, 86% of restaurant customers say they’ve noticed the uptick in menu prices, including 64% of QSR customers.4, 5
As dining out takes a bigger bite out of household budgets, customers are elevating their expectations for service. According to Datassential, 55% of operators say the time to complete an order hasn’t changed; 44% of Fast Casual operators report service is actually faster than the previous six months.6
Still, 27% of QSR customers have reported that it takes longer to order food, and 20% say it’s taking longer for restaurants to prepare their food.6 Whether perception or reality, restaurants would be wise to make sure their quality of service keeps pace with pricing. U.S. consumers are already stinging from inflation in the broader economy, and any disappointment in the dining experience could encourage them to dine at home instead.
1Bureau of Labor Statistics, National Restaurant Association, Nov. 2022
2 4 Key Takeaways from the November CPI Report
3NPD CREST®, 3 months ending September 2022
4Technomic, Inc., State of the Industry, June 2022
5Datassential LSR report, August 2022
6Datassential, Speed of Service report, August 2022