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The gap between restaurant and grocery prices widened in August

Limited-service prices rose 4.3% over the last 12 months, while full-service prices rose 3.8%

Alicia Kelso, Executive editor

September 11, 2024

2 Min Read
Restaurant prices remain stubbornPhoto courtesy of cottonbro studio / Pexels

The Consumer Price Index data released Wednesday morning from the Bureau of Labor Statisticsshow that menu prices ticked up by 0.3% in August, compared to 0.2% in July. Food-away-from-home prices are 4% higher year-over-year, compared to 4.1% in July.

Though August was slightly higher, the 0.3% is lower than May and June (both up 0.4%) and consistent with March and April’s menu inflation.

The index for limited-service meals increased 4.3% over the last 12 months and the index for full-service meals rose 3.8% over the same period.

By comparison, food-at-home prices, or grocery/supermarket, were flat in August after ticking up 0.1% in July. Year-over-year, grocery prices are up just 0.9%, compared to 1.1% in July and marking the 17th month in a row in which restaurant prices outpaced grocery prices, according to Kalinowski Equity Research.

President and chief executive officer Mark Kalinowski notes that the gapbetween grocery inflation and restaurant inflation widened by 10 basis points during August and is now 310 basis points in favor of grocery prices. The 22-year historical average is a 60-basis-point gap. The current gap is inching closer to the 2016 full-year disparity of 390 basis points, which resulted in the second-lowest same-store sales performance for the restaurant industry behind just the pandemic, he added.

Indeed, the restaurant/grocery pricing gap has been cited by several executives as a driver behind traffic erosion in recent months. New research from Circana finds a growing trend toward at-home dining in the past year, with 86% of eating occasions sourced from home.

“With dining out costing four times more than eating at home, many are cutting back on restaurant visits,” David Portalatin, senior vice president and industry advisor at Circana, said in a statement. “Meal patterns have shifted as consumers spend more time at home and adapt to new daily rhythms.”

Menu prices also continue to outpace the overall CPI, which came in at 2.5% in August, down 0.4% from July and its lowest level since early 2021.

Contact Alicia Kelso at [email protected]

About the Author

Alicia Kelso

Executive editor, Nation's Restaurant News

Alicia Kelso is the executive editor of Nation's Restaurant News. She began covering the restaurant industry in 2010 for QSRweb.com, FastCasual.com and PizzaMarketplace.com. When her son was born, she left the industry to pursue a role in higher education, but swiftly returned after realizing how much she missed the space. In filling that void, Alicia added a contributor role at Restaurant Dive and a senior contributor role at Forbes.
Her work has appeared in publications around the world, including Forbes Asia, NPR, Bloomberg, The Seattle Times, Crain's Chicago, Good Morning America and Franchise Asia Magazine.
Alicia holds a degree in journalism from Bowling Green State University, where she competed on the women's swim team. In addition to cheering for the BGSU Falcons, Alicia is a rabid Michigan fan and will talk about college football with anyone willing to engage. She lives in Louisville, Kentucky, with her wife and son.

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