Americans Paying More to Eat at Restaurants
Over the last 12 months, prices of food away from home – restaurants — have increased by 3 percent, while prices for food purchased at the grocery store have increased by a more modest 0.6 percent, according to a review of data from the Bureau of Labor Statistics by the American Institute for Economic Research.
That drumbeat continued in May, as restaurant food prices ticked 0.2 percent higher, while groceries fell by 0.1 percent.
Price increases at restaurants are consistent with stronger demand, said Theodore Cangero, AIER data scientist. Retail sales at food and drinking places increased by 8.2 percent over the last 12 months, including 1.1 percent in April and 0.1 percent in May, according to the U.S. Census Bureau.
The National Restaurant Association Restaurant Performance Index indicates that same-store sales and customer traffic have improved, and expectations about future sales remain optimistic.
An improving labor market, higher wages, income, and net worth, as well as improving consumer balance sheets, should continue to support discretionary spending and restaurant sales, Cangero said.
“Higher demand gives restaurant owners pricing power,” he said.
AIER uses government data from the Consumer Price Index to create the Everyday Price Index, a monthly look at the cost of living. The EPI includes items that consumers purchase on a monthly basis, with prices that are not contractually fixed such as food, gasoline, and personal care goods and services.
In May the EPI was up 1.1 percent, as gasoline prices rebounded and overall food prices stabilized. That’s compared to the CPI, which places a smaller emphasis on energy, which was up 0.5 percent on a not-seasonally-adjusted basis. The EPI is not seasonally adjusted.