Menu prices increase for the fifth straight month

Yahoo

17-07-2025

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Federal data released Tuesday morning from the Bureau of Labor Statistics shows that inflation accelerated to 2.7% on an annual basis in June, and is up 0.3% versus May, marking the fastest monthly jump since January.
The monthly overall food index increased 0.3%, matching May's increase. Grocery prices rose 0.3%, also matching May's increase, with coffee, beef, and fruits and vegetables ticking up. On an unadjusted 12-month basis, grocery prices are up 2.4%, under-pacing overall inflation, as well as menu prices.
Those menu prices rose 0.4% in June, marking an increase for the fifth straight month. On a 12-month basis, menu prices are up 3.8%, driven largely by the full-service category, which was up 0.5% in June. Limited-service meals, meanwhile, were up 0.2%, the slowest rate of increase in three months.
The index for full-service meals rose 4% year-over-year, while limited-service meals are up 3.5% over the same period. While menu inflation remains stubbornly high, it remains well below the 8.8% peak from March 2023, according to the National Restaurant Association.
Regionally, the West posted the fastest menu price growth in June, with a 4.1% year-over-year increase, followed by the South, with 3.9% growth, according to the association. Menu prices increased 3.5% year-over-year in the Northeast, and 3.7% in the Midwest.
Notably, June marked the 27th month in a row in which restaurant prices outpaced grocery prices, according to Kalinowski Equity Research. However, the gap between restaurant inflation and grocery inflation decreased by 20 basis points in June and is now 140 basis points in favor of grocery stores. Kalinowski notes that this is double the historical gap between the two categories, likely weighing on restaurant sales throughout the past year and with little relief expected throughout the duration of 2025.
'On an absolute basis, the +3.8% year-over-year increase for restaurant pricing is plus-40 basis points higher than the 23-year historical average of +3.4%,' president and CEO Mark Kalinowski wrote in a note. 'Compared to the last 1 to 3 years, inflation is gradually becoming less of a problem for the U.S. restaurant industry as a whole. So, while the current dynamic isn't favorable for restaurants, it isn't the largest challenge facing the restaurant industry and its sales trends, either.'
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