Restaurant Prices Outpace Grocery Prices for the First Time since Mid-2021

Doyo - DoYourOrder Restaurant Prices Exceed Grocery Prices for First Time

The recent announcement by the Bureau of Labor Statistics stating that restaurant prices have outpaced grocery prices on a 12-month basis since mid-2021 has come as discouraging news for the restaurant industry. This news poses a challenge for the industry, which has been working hard to recover from declining traffic numbers due to volatile economic conditions.

Restaurant CEOs have been touting their meals as relative bargains compared to eating at home. However, based on consumer price index data, this is no longer the case. The increase in food prices away from home is caused by the surge in food prices at schools as free lunch programs instituted during the Covid pandemic have expired. This sharp rise has been putting upward pressure on the overall food-away-from-home index.

While the price of food at home is up 8.4% in the last 12 months, it actually fell 0.3% from February. The price of eggs fell 10.9% in March from the prior month, while the fruits and vegetable index dropped 1.3%. This indicates that grocers have been working hard to put pressure on food and beverage manufacturers to keep prices down as shoppers deal with sticker shock.

Some suppliers have listened to grocers as their volume shrinks. For example, Conagra Brands and PepsiCo have said they won't raise prices any more this year, while McCormick, the owner of Old Bay seasoning, is trying to hike prices but is facing pushback from retailers.

The prices of items purchased by restaurants are expected to keep distorting the overall food-away-from-home index until the fourth quarter. This presents the perfect time for restaurants to continue the digitalization and automation of their work processes to reduce costs and avoid increasing prices to consumers. By implementing technology such as mobile ordering and payment, digital menus, and kitchen automation, restaurants can streamline their operations and offset the rising prices of food.


The news that restaurant prices have outpaced grocery prices on a 12-month basis since mid-2021 is putting pressure on the restaurant industry to find innovative ways to reduce costs and maintain reasonable prices for their customers. By implementing technology, restaurants can streamline their operations and avoid disruption caused by rising food prices.

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