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Cars ready for curbside pick-up at the Lee's Summit, Mo. Chick-fil-A restaurant. Photo: Metro Voice.

Restaurant menu prices rise over food costs

Skyrocketing inflation is hitting restaurant owners hard with both chains and local establishments raising menu prices.

Restaurant managers are seeing price increases of up to 300% on some items used in the industry with the industry average settling at 25% for now.

From Texas Roadhouse to McDonald’s to Chick-fil-A, customers are seeing a change.

“Just recently — really within the last month — things have started to go upside-down again,” stated Alan Natkiel, owner of Georgia’s Northside restaurant in New Hampshire, told Fox News.

“Where there’s smoke, there’s fire, and financially, it was blazing,” he said of recent costs, including grocery bills that are 25% higher than average.

The restaurant owner shared on social media that he was forced to raise prices on the menu for just about every item.  He said prices are up about 185% for brisket, 70% for chicken breast, 100% for frier oil, and glove prices have consistently been up 300% for more than a year now.

“People see an increase in prices of meat at the grocery store, but, by and large, they don’t see oil prices, they don’t see glove prices and no one wants to hear [that] your burger is an extra dollar because gloves cost more money,” he said.

Inflation across all items has grown to 4.2% over the last 12 months — the largest increase since 2008 — according to the Bureau of Labor and Statistics’ Consumer Price Index Summary released May 12. The fastest increase has come since late January when President Joe Biden was inaugurated. The additional trillions of dollars pumped into the economy by the Federal Reserve and what many see as a Congressional spending spree has caused many to sound the alarm bells.

The general food index has surged 2.4% year-over-year, and the “food away from home” index has increased 1.2%. The gasoline index, meanwhile, has increased 47.9% in the last 12 months. Shelter and transportation service-related inflation has also gone up.

The rising prices are likely to match the increase seen in the Great Recession of the early 1980s and possibly 1974 during the Arab oil embargo that brought much of the world to its knees.

Stimulus spending through extended Federal unemployment benefits is also seen as a huge cause. Restaurants cannot pay workers more than the total benefits in many cases. That’s caused a labor shortage.

Owners and restaurant consultants blame the price increases on a number of different factors including a severe and resulting wage inflation, higher gas prices, increased demand now that people are eating out more often, high delivery fees for apps like Uber Eats and more.

“Wage inflation…is a crisis in the country right now,” said Craig Dunaway, president of the Ohio-based Penn Station East Coast Subs franchise — which consists of more than 300 locations across 15 states. “It’s not like we’re at a competitive disadvantage. Everybody’s experiencing it. Our suppliers are experiencing it, too. They also have less employees.”

He added that about a third of Penn Station’s locations are struggling to hire new workers. The chain raised prices effective May 1 due to inflation, which he believes is here to stay until September.

“We had to pass through the extra costs because there’s been such inflation with wages,” Dunaway said. “…We have a lot of contracts that are locked in for three, six or 12 months, but when those contracts come due, I suspect we’re going to see more inflation on the food and paper side.”

Restaurant owners are also making decisions to cut portion sizes or buy smaller versions of their traditional menu items, like chicken wings, which have also surged in cost due to a nationwide shortage.

But industry experts believe customers will be understanding if they have to pay a little bit more for chicken wings in the next few months.

–Wire services