The Consumer Price Index in November rose 0.3% and is now 2.7% higher than November 2023, a figure largely in line with expectations but slightly higher than the 0.2% increase in each of the previous four months.
Data released Wednesday by the Bureau of Labor Statistics indicated the food-away-from-home index also rose 0.3% in November, after rising 0.2% in October. The index for both full-service and limited-service meals was up 0.3% over the month. Compared to last year, menu prices are up 3.6%, with limited-service meals rising 3.7% over the last 12 months and full-service meals up 3.6% over the same period.
For the 20th month in a row, menu prices continued to outpace grocery/supermarket inflation, which was up 1.6% year-over-year. That said, the food-at-home index rose significantly higher than restaurant prices month-over-month. In October, grocery/supermarket prices were up 1.1% vs. the same period last year. According to Kalinowski Equity Research, the gap between grocery and restaurant pricing in November was the smallest since April 2023.
In a note, president and chief executive officer Mark Kalinowski said the U.S. restaurant industry is on the path to have the worst non-pandemic same-store sales year (aside from 2020) since 2016, and the larger than historical average gap between restaurant and grocery prices is the reason why. However, he added, “the gap shrinking by quite a bit in November may provide some reason that the gap won’t be so bad from the restaurant industry’s perspective as 2025 unfolds.”
Meanwhile, for grocery prices, the higher index was driven by meats, poultry, fish, and eggs, which cumulatively rose by 3.8%. Beef in particular has experienced material increases of late, driven by lower livestock inventories. The impact has expanded a bit into the restaurant space – Chipotle just announced a 2% menu price increase, for instance, citing higher beef prices as a main driver. Egg prices are also staggeringly higher than last year, driven by avian flu outbreaks. According to Margin Edge, egg prices increased by more than 40% month-over-month.
Overall, the index for food increased 0.4% in November, after rising 0.2% in October. Federal data shows that food prices have increased by 9.9% since 2022, faster than in any year since 1979. According to the United States Department of Agriculture, food costs are expected to remain elevated throughout 2025, with projections of a 1.6% increase in grocery prices and a 3.4% increase in restaurant prices.
Contact Alicia Kelso at [email protected]
