Restaurant prices increased 0.3% month-over-month in August, according to new federal data released on Wednesday.
That continued a long string in which the prices at restaurants and other foodservice providers increased at a rate faster than inflation at grocers.
Indeed, prices for food at home were flat in August, according to the U.S. Bureau of Labor Statistics. Such prices have risen less than 0.1% each month since January.
Over the past year, prices for food at home have increased just 0.9%.
Restaurants look a lot more expensive by comparison. Over the past year, prices at restaurants have increased 4%, or 310 basis points higher than the rate of inflation at grocers. Restaurant prices have outpaced grocery prices each of the past 13 months.
The gap in pricing between the two main purveyors of food to consumers has been widely considered to be a key reason for declines in restaurant traffic.
Those declines have led major chains, including McDonald’s, Burger King, Taco Bell and others, to ignite a value war as they work to get more of that traffic back into their restaurants.
Prices have been increasing faster at limited-service restaurants, where they are up 4.3% over the past year, including 0.3% in August. They’re up 3.8% over the past year at full-service restaurants, and 0.2% in August.
Prices are up 2.4% at employee work sites and schools and are up 4% at vending machines over the past year.
Overall, consumer inflation has eased in recent months. The consumer price index increased 0.2% in August and is up 2.5% over the past year, a more normalized rate of inflation that is expected to give the U.S. Federal Reserve an opening to begin lower interest rates.
Restaurants have been raising prices at a higher rate than inflation for most of the past three years, thanks to a combination of their own rising prices for food and labor.
While the rate of inflation has come down by about 50% over the past year, as many of those costs ease and operators grow more concerned with traffic, grocers have brought their prices down much more quickly.
Grocery chains like Walmart are now actively courting restaurant customers with lower prices.
That said, retailers aren’t getting all the sales. Lower-income consumers are cutting back on the way they buy groceries, which is causing problems for concepts like dollar stores.
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