Restaurant prices have surged by nearly 9% year-on-year, according to the Department of Labor
The cost of eating at restaurants in the US outpaced grocery prices on a 12-month basis in March for the first time since mid-2021, Labor Department data showed on Wednesday.
According to the calculations, restaurant prices have risen 8.8% over the last 12 months, surging for the third consecutive month and up by 0.6% from February. Meanwhile, grocery, or ‘food at home’, inflation has risen by 8.4% year-on-year, dropping 0.3% from February.
The data may be a bad sign for the American restaurant industry, analysts say, which has already been struggling as consumers cut back on eating out in an attempt to save money amid the cost-of-living crisis. According to CNBC, many restaurants have recently been hiking prices to avoid a drop in their profit margins, forcing consumers to further limit their restaurant visits or spend less when they eat out.
However, Bruce Grindy, the chief economist from the National Restaurant Association, said the statistics may have been distorted by the increase in food prices at schools due to the expiry of free lunch programs that were set up during the Covid-19 pandemic.
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“As a result, this price index rose sharply in recent months, which is putting upward pressure on the overall food-away-from-home index,” he wrote in a blog post on Wednesday, as cited by CNBC. He noted that he expected this index to continue muddling the overall food-away-from-home readings until the fourth quarter of the year.
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April 15, 2023 at 12:09PM