The Sushiholic

Smart Choice Restaurant & Food Lovers

Best Restaurant

Inflation on the menu as U.S. restaurants pass on soaring costs

Koumi, founder of a six-location chain called Green Market Cafe, tries to keep food and paper costs below 35{b7188976447dc8fb76bd10b2098e36eff98c6e9093d21efeb6ac4d47a857c30e} of his menu prices, but lately his computers keep flagging items that go above that parameter. He’s paying twice as much to buy chicken as he was in January, and other meats and paper products have gotten more expensive too.

Koumi isn’t too worried about standing out with his price increases, because “everyone’s doing it. Some people are doing it really drastically,” he said. “Could it go up more? It’s scary. I’m hoping that it levels.”

For now, there’s no sign of abating.

Chipotle recently raised menu prices by as much as 4{b7188976447dc8fb76bd10b2098e36eff98c6e9093d21efeb6ac4d47a857c30e}, after increasing average pay to $15 an hour and hiring thousands of workers to keep up with demand. American homestyle chain Cracker Barrel Old Country Store Inc., which earlier this year raised menu prices by 2.8{b7188976447dc8fb76bd10b2098e36eff98c6e9093d21efeb6ac4d47a857c30e}, is bumping up that increase to about 3{b7188976447dc8fb76bd10b2098e36eff98c6e9093d21efeb6ac4d47a857c30e} amid continued pressure from wage and commodity expenses, including pork for sausage and bacon.

McDonald’s Corp., which raised its hourly wage by about 10{b7188976447dc8fb76bd10b2098e36eff98c6e9093d21efeb6ac4d47a857c30e} in May, hasn’t announced any jump in prices yet but said early this year that franchisees could handle labor inflation “between judicious pricing on the menu as well as just thinking about productivity savings.”

Historically, restaurant operators tend to raise menu prices a few times a year. Between 2015 and 2019, that amounted to increases of about 2.5{b7188976447dc8fb76bd10b2098e36eff98c6e9093d21efeb6ac4d47a857c30e}, according to BTIG LLC analyst Peter Saleh. This year, the rate may reach about 4{b7188976447dc8fb76bd10b2098e36eff98c6e9093d21efeb6ac4d47a857c30e}, Saleh wrote in a note to investors.