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Why Restaurant Prices Are Set to Soar in 2022

Why Restaurant Prices Are Expected to Rise in 2022

The year 2021 has seen an unprecedented increase in food costs, as reported by the Bureau of Labor Statistics in its latest Consumer Price Index Summary. The report shows that the overall cost of goods and services, as measured by the All Items Index, increased 6.8% between November 2020 and November 2021, marking the largest 12-month cost increase since 1982. Notably, the food index also experienced a significant increase of 6.1%, affecting both grocery purchases and eating out.
Whether you choose to cook at home or eat at a restaurant, it is clear that prices are steadily rising. The rising costs have affected certain food categories more than others, with beef prices up 24%, bacon up 20% and eggs up 12%, according to Visual Capitalist. This rise in prices poses challenges for both restaurant owners and customers, as businesses struggle to maintain profit margins without burdening consumers with exorbitant menu prices.

The impact on restaurants

Restaurant owners across the country are grappling with the consequences of rising food costs. Sara Lund, owner of Bodega and The Rest in Utah, highlighted the difficulties faced by restaurateurs. She explained that while raising menu prices can alleviate some of the financial strain, it is not always a viable solution, especially when protein prices have increased by 40%. The restaurant industry’s thin margins make it difficult for companies to absorb these cost increases without passing them on to customers.
A survey conducted by the National Restaurant Association found that 95% of restaurants have experienced significant supply delays or shortages of key food items in recent months. As a result, 75% of restaurants have had to change their menus, either by raising prices or using alternative strategies. This indicates the widespread impact of rising food costs across the industry.
Some prominent restaurant chains have already begun to adjust their menu prices to offset the increased costs. The Cheesecake Factory, for example, raised its menu prices by 3% in the last quarter of this year, with the possibility of another 2% increase next year. Wingstop franchisees are also considering menu price increases of up to 5% due to higher ingredient and packaging costs.
Restaurant owners and industry leaders are concerned about the lack of a clear solution to these challenges. Fazoli’s CEO Carl Howard expressed frustration with the lack of leadership from policymakers, saying, “The entire industry is feeling it. And the biggest problem is that no one, especially the leadership of our country, has given us any indication that this is going to end” (via QSR).

Lingering effects and government response

Historical precedents suggest that the effects of such crises can last for a long time. Deloitte’s findings following the SARS epidemic in China showed that demand for certain products, such as yogurt and disinfectants, remained high for more than 24 months after the crisis. If a similar pattern emerges after the COVID-19 pandemic, it is likely that prices for goods and services will remain elevated for an extended period.
However, President Joe Biden addressed concerns about inflation in a recent statement, assuring Americans that efforts are being made to address rising prices. He acknowledged that while there has been some slowing of price and cost increases, it is not happening as quickly as desired. The President emphasized that lowering prices is a top priority for his administration in order to ease the financial burden on consumers (via The White House).

Bottom line

By 2022, restaurant prices will continue to rise due to rising food costs. The challenges restaurant operators face in maintaining profit margins while keeping menu prices affordable for consumers are significant. The impact of supply delays, shortages, and increased ingredient costs has forced many restaurants to adjust their menus and raise prices. The lack of a clear resolution to these challenges and the potential for long-term impacts make it critical for both industry leaders and policymakers to work together to find sustainable solutions.
As consumers, it is important to be aware of these factors and make informed choices when dining out. As restaurants strive to navigate these challenging times, supporting local establishments and understanding the reasons behind price increases can contribute to a more resilient and sustainable restaurant industry.


Why are restaurant prices expected to rise in 2022?

Restaurant prices are expected to increase due to unprecedented increases in food costs, including higher prices for key ingredients such as beef, bacon, and eggs. These cost increases have a direct impact on restaurants’ profit margins, forcing them to adjust menu prices to maintain financial sustainability.

Will cooking at home become a more cost-effective option than eating out?

While cooking at home can help control costs to some extent, the rise in overall food prices means that even buying groceries to cook at home has become more expensive. Therefore, both eating out and cooking at home may experience noticeable price increases.

How will the increase in restaurant prices affect consumers?

The increase in restaurant prices may have a direct impact on consumers’ dining choices and budgets. Higher menu prices may result in less frequent dining out or a shift to more affordable options. Consumers will need to consider the financial implications and make informed decisions about their dining experiences.

Are all food categories experiencing the same level of price increases?

No, some food categories have seen larger price increases than others. For example, beef prices increased by 24%, bacon by 20%, and eggs by 12%. This variation in price increases across food categories contributes to the overall increase in restaurant prices.

How are restaurants coping with rising food costs?

Restaurants face the challenge of balancing increased costs with keeping prices affordable for customers. Some have resorted to adjusting menus, raising prices, or exploring alternative strategies to mitigate the impact of rising food costs. However, striking a balance between profitability and customer satisfaction remains a complex task for restaurants.

Are efforts being made to address the issue of rising restaurant prices?

The government, industry leaders and policymakers are aware of the challenges facing the restaurant industry. While there is no immediate solution, there are ongoing discussions and efforts to find sustainable solutions. President Joe Biden has expressed his commitment to addressing rising prices and lowering costs as a top priority for his administration.

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