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Restaurant Prices Are Jumping In 2011
By
Garth Johnston
Published May 17, 2011
Modified May 17, 2011
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By
Garth Johnston
Published May 17, 2011
Modified May 17, 2011
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Get ready to pay more for that once-free bread basket! After a year of recession-inspired "value deals," rising worldwide food costs have the U.S. Department of Agriculture forecasting a rise in restaurant prices of three to four percent this year. The predicted bump comes after restaurant prices nationally only rose 1.3 percent in 2010, the lowest annual increase on the books since 1955. But with prices for corn and wheat spiking upwards, that's changing quickly.
According to the USDA since March 2010 the prices of meats across the board have risen, including beef (up 12.2 percent), pork (up 11.2 percent) and poultry (up 2.2 percent), partially because of the rising cost of feeding livestock. None of those indexes show any sign of dipping this year.
The restaurants that are expected to be hit the worst by the rise in food prices are those focusing on Italian and Mexican foods, as the costs of "driven by big increases in such ingredients as bread and pasta, up 23 percent, and potatoes, up 21 percent."
Making things even tougher for the industry is the fact that even though the economy may be forcing prices up, the new economic order has already had a marked effect on the way diners go out for dinner. Even rich diners don't want to spend too lavishly when dining out (expensive prix fixes excluded). All of which makes a recipe for a bad year to be getting into the restaurant business—but you already knew that opening an eatery was a terrible idea.
The USDA does have one tiny bit of good news for restaurant owners: As much as restaurant prices are expected to rise this year, grocery prices are expected to rise more. The USDA forecasts grocery store prices will rise 3.5 to 4.5 percent this year.
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Garth Johnston
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