Restaurant prices in December rose at the highest rate in seven years while grocery prices remained low.
According to the U.S. Department of Labor, prices at full-service restaurants rose 0.5 percent while at limited-service restaurants, prices were up 0.4 percent. The price for food purchased at a grocery stores and consumed at home rose 0.3 percent.
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In December, a Datassential study showed that fast-food hamburger prices have jumped 54 percent over the last decade to about $6.95, and chicken sandwiches are up 27 percent, both outpacing inflation during the same time period.
Michael Halen, a Bloomberg Intelligence analyst, said the cost gap between eating out and eating at home “has continued to widen pretty aggressively. It’s a problem.”
The restaurant price bump can be attributed to higher labor costs in a tight job market and higher costs for supplies, per Bloomberg, plus fewer people are eating out.
Data reported in October by market research company NPD Group showed that people are eating at home 80 percent of the time compared to 75 percent of the time a decade ago. The study found that both people over 65 and Millennials have decreased their frequency of eating out, NBC News reported.
But as restaurant companies raise prices they also are increasing their emphasis on convenience services like delivery, carryout, and pre-ordering and pre-paying for dine-in meals, Restaurant Dive noted.
Meanwhile, the Labor Department predicts grocery prices will continue to rise slowly in 2019, between 1 percent and 2 percent. Food-away-from-home prices are expected to continue growing at a consistent rate and to rise between 2 percent and 3 percent.
Over the past year, four of the six major grocery store food groups saw increases, per the DOL, contributing to an overall annual rate hike of 0.6 percent. The food away from home index increased 2.8 percent over the same period.
Among the grocery store products expected to continue to see lower prices in the coming year are pork, fats and oils, processed fruits and vegetables, and nonalcoholic beverages. Beef and veal, poultry, fish and seafood and sugars and sweets are among the food groups that are expected to see increases but at rates lower than their 20-year historical averages.
