Consumers in 2025 remain scarred by the post-pandemic inflationary period and are fearful of the impact of tariffs and expect further price increases at restaurants as a result.
They appear to be correct on that front, at least according to surveys from Restaurant Business sister company Technomic.
According to the survey, 62% of consumers expect price increases over the next six months. That’s almost the same percentage of restaurant operators—61%--who believe menu prices will increase over that period, at least due to tariffs.
Evidence already suggests this is happening. “We’re starting to see menu inflation kick back up again,” Rich Shank, senior principal with Technomic, said at the FSTEC restaurant technology conference in Orlando on Tuesday.
Food-away-from-home prices have risen 3.9% over the past 12 months, according to federal data released last week. By comparison, food-at-home prices are up 2.7%. Overall inflation is up 2.9%.
Maybe most importantly: Average hourly earnings are up 3.7%. Average weekly earnings are up 3.4%. Prices in restaurants, in other words, are exceeding wage and earnings growth.
“The challenge we’re experiencing is the fact that inflation in other segments has actually cooled a lot quicker over the last several quarters than in the restaurant space,” Shank said. “It’s problematic to say the least, because people are becoming less able to afford what we’re offering.”
“We’re actually moving in the opposite direction of where we want to be right now,” he added.
Consumers are more aware of price increases, and perhaps to a fault, which is largely the result of the post-pandemic inflationary period combined with social media. Consumers think prices are going up more than they are, but they’re not wrong that prices are going up.
“They’re noticing these things much quicker these days than they did two to three years ago,” Shank said. “They’re expecting price increases at a faster rate than they’re occurring.”
Consumers are concerned about the impact prices could have on their finances. More than half, 56%, told Technomic that they are closely following tariffs. Nearly half, 48%, are paying close attention to inflation.
And 80% of consumers are either concerned or very concerned about the impact of rising prices on their finances.
“Consumers are primed to expect price increases,” Shank said.
Operators, unsurprisingly, are worried about their costs. The vast majority, 84%, told Technomic last quarter that they were worried about food costs. Nearly two-thirds, 65%, said they were worried about labor costs—though that was down from 79% in the first quarter. And 65% are worried about tariffs, according to Technomic.
There is some contradiction in survey data on tariffs, however. Nearly three-quarters of operators told Technomic they are confident they can manage the higher costs. And 71% said they taken steps to protect themselves from tariffs. But only 24% of operators are very familiar with the tariff schedule. So operators are confident in their ability to withstand the problem but they are not entirely familiar with what the problem actually is.
All this is coming as the restaurant industry is dealing with weak sales. Technomic expects limited-service sales to rise between 3.7% to 4.8% this year. But, Shank said, “We’re trending toward the lower end.”
Members help make our journalism possible. Become a Restaurant Business member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.