Restaurant prices just had their biggest spike in 40 years

Restaurant prices just had their biggest spike in 40 years
Scott Olson/Getty
  • Restaurant menu prices are up 0.8% according to BLS data.
  • Dining prices haven't risen this sharply since 1981.
  • Restaurants are coping with a labor shortage and more expensive ingredients.

Restaurants prices are increasing faster than they have in decades as labor and ingredients grow more expensive.

Pricing for dining out increased 0.8% from June to July this year, according to new data from the Bureau of Labor Statistics. Menu prices haven't increased this sharply in years - the last time they reached this level was in February of 1981, Restaurant Business Online reported.

Prices seem to be increasing faster lately. Between April and May, they went up 0.6%, and increased by 0.7% between May and June. Restaurant prices increased more than the full consumer price index, which went up by 0.5% in July. Prices are up on a yearly basis too, at 4.6% over July 2020, according to BLS.

Menus at Chipotle, McDonald's, and other chains reflect these climbing prices. The greatest price increases at the 24 restaurants they studied have been 10% at Taco Bell, 8% at McDonald's, and 8% at Dunkin', followed by Chipotle and The Cheesecake Factory, according to an analysis by Gordon Haskett Research Advisors. Exact prices vary by market. Applebee's, Papa John's, Red Robin, and a few others have not adopted any price increases over the past year.

Chipotle raised prices across its menu by about 4% in June, a move the company said was prompted by increased wages for workers.


Nearly every fast-food and fast-casual chain will likely follow, analysts at Gordon Haskett said.

Read more: Kraft Heinz employees and analysts say 3G Capital's cost-cutting business strategy is setting it up for failure. Here's how the private equity firm's playbook left it playing catchup to its rivals.

Labor costs are partially the cause of these rising prices. A truck-driver shortage is making transportation more expensive, while restaurants, grocery stores, and factories are struggling to stay fully staffed. Processing plants and farms are facing the same problems. For example, chicken farms don't have enough employees, so they're struggling to process birds quickly.

Labor costs have increased for restaurants over the past year, but so did the price of ingredients. Staple Chipotle items, like corn and avocados, grew more expensive this year as demand rose and shipping delays drove prices up.

Experts say rising food costs are a combination of growing demand as consumers increase spending and supply-chain struggles. Shipping delays and severe weather events have made crucial commodities more expensive and difficult to obtain.


Do you have a story to share about a retail or restaurant chain? Email this reporter at