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Menu prices at sit-down and limited-service restaurants continued to rise in May, while grocery prices remained flat. In the 12 months leading up to May, menu prices at full-service restaurants increased by 3.5% and by 4.5% at limited-service restaurants. The significant increase in fast food prices has caused customers to cut back on spending and voice their complaints online, tarnishing the sector’s reputation for affordability. Despite the price hikes, restaurant chains have continued to raise menu prices in an attempt to maintain profitability.

McDonald’s USA president Joe Erlinger recently acknowledged that prices at the fast food chain have increased by about 21% over the past five years, slightly below the overall inflation rate. However, customer complaints about high prices, such as $3 hash browns and $16 meals, have gone viral on social media platforms. In response to the backlash, restaurant chains like Burger King, KFC, and Starbucks have introduced menu bundles and deals to attract customers, although these discounts are temporary and do not deter operators from continuing to raise prices.

In contrast to the steady increase in menu prices, grocery prices have shown signs of moderation after months of inflation driven by various factors, including the pandemic, Ukraine war, extreme weather events, and price gouging by companies. Some items have even seen price decreases, with apple prices dropping by 13.2%, potatoes by 3.2%, and ham and cheese by 5.4% and 3.4%, respectively. However, prices for certain items like uncooked beef roasts, hot dogs, and bacon have seen significant increases due to supply chain constraints and other factors.

Overall, grocery prices remained flat from April to May, with slight increases in items like bacon, bread, and uncooked ground beef and chicken. Some prices decreased during this period, including milk, rice, eggs, and fresh vegetables. Despite the temporary relief in grocery prices, the trend of rising menu prices at restaurants is expected to continue as operators grapple with higher costs and the need to maintain profitability. Consumers may need to adjust their spending habits in response to these ongoing price hikes in the food sector.

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