Menu Prices Are Rising to Record-Breaking Highs

According to a QSR Magazine report, the restaurant industry is currently facing the largest 12-month menu price increases in recorded history. Prices for food away from home increased 5.3% year-over-year in October, quick-service menu items rose 7.1% in the past year and full-service meals increased 5.9% in the past year.

These higher prices are a result of the restaurant industry’s continued battle with labor and supply shortages, with fast-food franchises especially suffering. McDonald’s franchisees are facing a 10% wage inflation, forcing the powerhouse to increase menu prices by 6% compared to 2020. Chipotle’s menu prices rose up to 10% in Q3 of this year as well.

But this menu price inflation isn’t stopping customers from enjoying fast-food and quick-service meals.

“The six percent [increase] has been pretty well-received by customers,” McDonald’s CEO Chris Kempczinski told QSR. “We do certainly have a very big focus to make sure that we are balancing cost pressures and being able to cover those with making sure that our value perception by customers continues to be favorable, and we are continuing to see those surveys and scores from a value favorability perspective still positive from customers.”

Because higher prices are having a minimal impact on customer loyalty, further pricing is very likely to occur later this year and into 2022.