Think twice before going out to grab coffee or a bite to eat: Inflation is on the menu.
Restaurants across the nation are grappling with how to deal with the increased costs for labor, food and other supplies. The answer, for several national chains including Chipotle and Starbucks, is to pass along those increased expenses to consumers by hiking menu prices.
Overall, the Labor Department says that the cost of food away from home increased 6% nationally for consumers between December 2020 to December 2021 — marking the largest price increase since January 1982. During that same period of time, overall inflation also hit a 40-year high, at 7%.
Where restaurant prices are rising
Some food chains are hiking prices well above the regular rate of inflation. Here’s a look at how menu prices are changing at several major restaurants.
At Chipotle, you’ll now get less burrito for your buck.
The Tex-Mex fast-casual food chain raised prices 4% across the board in December alone, contributing to an overall increase in food prices of about 10% since last year.
Over that same period of time, The Wall Street Journal reported that sales were up 15.2%. CEO Brian Niccol told the paper that another price hike is likely later this year.
At the 2022 ICR investment conference in January, Domino’s CEO Ritch Allison said he expects the pizza chain will face an “unprecedented increase” in food costs this year.
The company is experimenting with ways to offset these costs without hiking pizza prices across the board.
For example, Domino’s is reportedly limiting some national promotions to online-only orders and reducing the number of chicken wings included in certain deals. The net result is that you'll be paying more or getting less (or both).
Until May, Domino’s is also offering $3 discounts on carryout orders in a bid to reduce delivery costs.
In addition to more expensive theme-park tickets, some Disney park-goers have noticed price increases at Disney restaurants.
Alessa Dufresne, an Orlando-based Disney blogger for Inside The Magic, noted that several dishes and cocktails at The Happiest Place on Earth cost $2 to $3 more in 2022. Examples include a rum cocktail called the Nautilus, which now costs $35, up from $32. A seafood pot pie dish jumped $3 to $28. A lemon herb chicken entree sells for $24, up from $22.
Disney CFO Christine McCarthy foreshadowed some of these changes in a fourth-quarter earnings call.
“We can cut portion size, which is probably good for some people's waist lines,” McCarthy said in regards to inflationary pressures. “We can look at pricing where necessary.”
The Big Mac now comes with a bigger price tag.
To keep up with the soaring cost of meat as well as an approximate 10% increase in wages for McDonald's workers, the fast-food chain jacked up menu prices by about 6% in 2021, according to CFO Kevin Ozan.
"We ended up with pricing for the year a little over 6%," Ozan said in an quarterly earnings call in January. "That was relatively similar to where food-away-from-home [inflation] was for the year in 2021."
In the call, executives hinted that more price increases could happen in 2022 but didn't offer specifics.
The coffee-chain giant Starbucks is planning on its third price hike in recent months, but executives say that hasn’t dampened demand.
In a quarterly earnings call Feb. 1, CEO Kevin Johnson said the company increased prices in October 2021 and in January 2022.
“We have additional pricing actions planned through the balance of this year,” Johnson said.
Starbucks did not say exactly how much menu prices have or will increase for those looking to get their caffeine fix.
However, CBS reported that the price of a Venti (large) coffee was $2.45 in 2021 but now costs $2.95 in some locations, an increase of 20%.