Even with the drop in food prices, the cost of dining out is still on the rise

The prices of food products remained stable in May, after being marked the month before. But menu prices, a source of frustration for budget-conscious consumers, are still rising even as restaurants brag about their discounted meals.

Menu prices rose 0.4% at sit-down restaurants from April to May, adjusted for seasonal fluctuations, according to inflation data released Wednesday by the Bureau of Labor Statistics. At that time, prices rose 0.2% at limited-service outlets, which include fast-casual and fast food.

The gap between food product growth and menu price inflation was more pronounced for the entire year. Food prices rose by 1% in the 12 months to May. In that period, menu prices at full-service or sit-down restaurants rose 3.5%. They jumped 4.5% at limited-service restaurants, which include fast food and fast-casual.

Increases, particularly in fast food prices, have caused customers to shy away from spending and complain online, eroding the sectors reputation for affordability. Restaurant chains raise menu prices every year, but since the pandemic the increases have come fast and furious. Executives noted that for a while, higher prices didn’t scare people away. But customers eventually snapped, leaving the chains to change course and sometimes become defensive.

McDonalds USA President Joe Erlinger recently said in an open letter that prices have risen about 21% over five years. It’s slightly less than inflation overall, not 100% as, he said, people might think, thanks to an analysis by FinanceBuzz. He recently revealed that McDonalds prices have increased 100% since 2014. However, he admitted that in some places, Big Mac meals can go much higher. On TikTok, complaints about $3 McDonalds hash browns and $16 meals have gone viral.

Chains from Burger King to KFC to Starbucks have also started advertising menu packages and deals in a bid to lure customers back. However, the agreements are temporary, designed to jump-start sales in a competitive environment. They do not change the plans of restaurant chain operators to continue raising prices.

What’s happening at the grocery store

Food prices, on the other hand, have moderated, a welcome change from months of growth that started with the pandemic and were worsened by the war in Ukraine, extreme weather and companies taking advantage of the opportunity to cut prices, among other factors. In February, overall food prices remained flat for the first time since April 2023.

Some items have even gotten cheaper over the year.

Apple prices fell 13.2%, largely thanks to a bumper harvest in the fall. Also in the production corridor, potatoes fell by 3.2%.

Apple prices have dropped significantly.  - Justin Sullivan/Getty ImagesApple prices have dropped significantly.  - Justin Sullivan/Getty Images

Apple prices have dropped significantly. – Justin Sullivan/Getty Images

Ham was down 5.4% and cheese was down 3.4% (bread was up 1%, so your sandwich isn’t a total bargain). Coffee fell 2.5% and milk fell 2.1%. Rice was down 2%, and fish and seafood combined fell 1%.

Other items rose in price this year, particularly in the meat aisle, in part because of a limited supply of cattle and the deadly wildfires in Texas. Roast beef was up 6% and ground beef was up 4.9%.

Hot dogs were up 7.3% and bacon was up 6.9%. Poultry increased by 1.2%. Eggs, which last year saw great growth, increased by 3%.

While food prices rose overall for the year, they were flat from April to May. In that time, bacon jumped 1.7%, bread rose 1.1%, and uncooked ground meat and chicken each rose 1%. Other prices fell: milk fell by 1.3% and rice by 1.2%. Together, fresh vegetables fell 0.4%, as did eggs.

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