The Department of Labor, Bureau of Statistics determined that grocery prices were higher by 12.4 percent in October compared to the comparable month in 2021.  Concurrently, year-over-year restaurant prices were up 8.6 percent.  The differential is narrowing and consumers searching for value are anticipated to eat more meals at home than they obtain from QSRs and casual dining restaurants.

Restaurant operators have successively raised menu prices to compensate for higher ingredient and labor costs.  This strategy is now in conflict with a reluctance to spend by consumers concerned over rising fuel, energy, housing and medical expenses. Most QSRs are evaluating specials, value meals and coupons to avoid the downward spiral of decreased traffic and increased costs.

During COVID restrictions, consumers ate at home and the food habits developed during this period will persist.  This is evidenced by supermarkets competing with restaurants for available expenditure on food.  The promotion of house brands to reduce cost and offers of prepared meals especially in upscale “destination supermarkets” will be attractive to frugal consumers searching for value.