Restaurant prices are rising at record rates and experts say they'll never come back down

Menus are seeing the largest increase since 1981
Soup Spoon Cafe Sandwich
Posted at 10:16 AM, Apr 09, 2022

Soup Spoon Cafe in Lansing, like most all restaurants in the U.S., feels the weight of inflation daily.

Research from the U.S. Bureau of Labor Statistics shows food prices started to jump dramatically in Michigan in 2021.

Meats, poultry, fish and eggs top the list, jumpking by 16.6% from February 2021 to February 2022.

Consumer Price Index for all Urban Consumers
Consumer Price Index for all Urban Consumers

General Manager at Soup Spoon Cafe, Keith Buchele said;

"People see grocery store prices go up and they don't really think about it too much. I mean, their grocery bills are higher, but then when they go out to eat, and their bills are higher, they're usually a little bit more surprised. Because I think people have a perception that we are kind of immune to those things. That just because you paid $15 for a hamburger, six months ago, or a year ago, the hamburger should still be $15. Whereas inflation especially is something that affects the restaurant industry directly because we have to buy, we don't grow our own food. So by the time the food gets to us, by the time our grocery bill comes in, it's much much higher. So inflation has a direct correlation with our costs."

While looking over statistics from the Bureau of Labor, Patrick Anderson principal of the Anderson Economic Group said, "This is really serious inflation when you got 13%, 16%, 11%, the bright spot is 5% for vegetables, and cereals up 13.9% in one year. This is a big problem."

Buchele said in his 30 years in the restaurant industry he has never seen grocery bills or invoices, "climb so quickly."

With farmers having to pay more for water, fertilizers, food, and hiring employees, food prices continue to rise.

Further research by the Bureau of Labor shows that between February 2021 to February 2022, food prices have increased by 8%.

Food Prices Increase
Bureau of Labor Statistics

Anderson said, "I bought some meat to make a barbecue, I basically bought meat and a couple other things. I went up the counter and it was over $100. I said, 'Oh my gosh!'"

A survey done by business leaders for Michigan shows that 49% of Michigan restaurants expect inflation to continue at this rate for the next 6-12 months.

34% think inflation will increase.

16% expect inflation to come down in the next year.

Restaurant Survey
Michigan Restaurants Survey

"I think oil prices could go up and oil prices probably come down, but these food prices and the other inflation that's crept into the economy, this this has something to do with the United States policy," said Anderson. "And that's not something's going to go away soon."

Buchele said, "We've been spending a lot of time recently, navigating not increasing prices, trying to do everything we can internally to not price ourselves out of the market. My hope is that the guests understand that we're not immune to the things that they're seeing."

The National Restaurant Association reports that menu prices increased 6.8% between February 2021 to February 2022.

The largest 12 month increase since 1981.

"I think this is the new price of food and I think it's fair to pay for what's good," said Buchele. "I'll never buy a yacht but I can sure afford a nice dinner."

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