The price of full-service meals rose 8.7 percent in April year-over-year, the segment’s highest increase since 1997 when data was first collected, according to the Bureau of Labor Statistics.
Overall, the food away from home index rose 7.2 percent, while the price of quick-service products grew 7 percent.
April marked the second month in a row that casual-dining restaurants saw greater year-over-year inflation than quick service. Prior to that, it hadn’t happened since March 2020.
Here’s how inflation has trended the past few months:
October
- Food away from home index: 5.3 percent
- Quick-service menu prices: 7.1 percent
- Full-service menu prices: 5.9 percent
November
- Food away from home index: 5.8 percent
- Quick-service menu prices: 7.9 percent
- Full-service menu prices : 6 percent
December
- Food away from home index: 6 percent
- Quick-service menu prices : 8 percent
- Full-service menu prices: 6.6 percent
January
- Food away from home index: 6.4 percent
- Quick-service menu prices: 8 percent
- Full-service menu prices: 7.1 percent
February
- Food away from home index: 6.8 percent
- Quick-service menu prices: 8 percent
- Full-service menu prices : 7.5 percent
March
- Food away from home index: 6.9 percent
- Quick service menu prices: 7.2 percent
- Full service menu prices : 8 percent
Restaurants nationwide continue to implement price hikes as commodity and labor pressures persist.
At Chili’s in particular, inflation exceeded expectations during its most recent fiscal quarter. Food and beverage costs were 180 basis points higher, driven by commodity inflation of 11 percent ,while labor was unfavorable by 100 basis points versus 2021, fueled by wage inflation of 10 percent.
The full-service giant exited the quarter with 4.6 percent pricing, and another increase is expected this summer. The chain plans to release a new menu to reduce operational complexity and better mitigate macroeconomic pressures.
“[The menu] has been in test,” CEO Wyman Roberts said. “We feel good about the way we’ve restructured our platforms to deliver better margins, but also to deliver us more pricing flexibility across geographies and across various menu items, especially as we’re starting to see commodity prices significantly different in various categories.”
First Watch managed to avoid price increases in 2021, but it began this year with 3.5 percent pricing, and the chain believes it has room to do even more later in the year, if necessary.
Chili’s, First Watch, and a number of brands claim they haven’t seen any significant impact from guests in response to the price increases.
“There’s no really one metric that’s a trigger point for us,” said First Watch CEO Chris Tomasso, describing how the company balances pricing and value. “Probably every restaurant company evaluates pricing, constantly based on margin, and we certainly look at it very closely. So, as we go through the year and we look closely at what our actual experience is and where we have pricing needs or inflation that we’re not offsetting, then we’ll constantly take a look at it and reevaluate it. But we did have a very good first quarter, and I can just tell you that we constantly look at this.”
The likely reason customers haven’t responded as strongly is because they’re feeling inflation everywhere, including grocery stores. The food at home index increased 10.8 percent year-over-year, the largest 12-month increase since November 1980. Also, the index for meats, poultry, fish, and eggs grew 14.3 percent over the last year, the largest 12-month rise since the period ending May 1979.
