Menu price inflation hit a 39-year high in November as soaring costs for labor and food led restaurants around the country to increase their charges to customers.
The food-away-from-home index rose 0.6% in November and 5.8% over the same period a year ago, the U.S. Bureau of Labor Statistics said on Friday. That was the highest annual rate of increase for that index since 1982.
And even that undersells just how much restaurant inflation there actually is, because the index includes prices for food at schools that have fallen 45% over the past year.
Prices for limited-service restaurants, hit hardest by the labor shortage, have risen 7.9% over the past year.
Prices for full-service meals are up 6% over the past year.
Restaurant inflation is due to a combination of factors, namely a labor shortage that has led to a dramatic spike in wages. According to Restaurant Business sister company Technomic, wages are up 14% this year, nearly three times the overall rate of inflation.
In addition, labor problems are causing major disruptions in the supply chain, making it difficult for meat processors to get enough staff to produce chicken or beef and leaving distributors without enough drivers to get goods to restaurants.
The producer price index rose 10.5% in October, an actual improvement from the 13% increase in September. Yet prices for many restaurant ingredients remain high: Cooking oils are up 39%, Technomic Managing Principal Joe Pawlak said. Chicken is up 36% and beef is up 41%.
This level of menu price inflation typically pushes consumers away from restaurants. But grocery prices are not much better. Food-at-home inflation rose 6.4% year-over-year and has outpaced restaurant inflation for each of the past three months.
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