Rising Restaurant Costs Continue to Elevate Food Prices

 

**Current Trends in Food Prices: A Financial Perspective**

Your perspective on food prices may vary depending on your shopping habits. According to the latest Consumer Price Index (CPI) report, average grocery prices have remained stable for the fourth consecutive month. However, dining out continues to become more costly.

**Overall Food Price Trends**

The overall food prices, encompassing both groceries and restaurant purchases, saw a slight increase from April to May. The CPI report released on June 12 by the Bureau of Labor Statistics highlights these changes. The CPI, a measure of inflation, tracks the average cost changes of various items over time.

The report indicates that food prices are 2.1% higher than they were 12 months ago, compared to a 6.7% increase in the previous year. Despite the slower inflation rate, food costs remain high, having increased by 26% since early 2020.

**Key Insights on Food Prices**

**Groceries:** The index for food at home rose by 1% year-over-year. From April to May, grocery costs remained unchanged.

**Dining Out:** Restaurant prices increased by 4% compared to last year, with a 0.4% rise from April to May. Specifically:

- Limited service meals (takeout only) are 4.5% more expensive than last year.

- Full-service meals (sit-down restaurants) are 3.5% higher year-over-year.

**Impact of Inflation on Grocery Bills**

Grocery prices have been relatively stable, showing no change in three of the past four months. They even decreased slightly in April. This stability has led to significant savings for consumers. In May, major retailers such as Target and Walgreens offered discounts on pantry staples, seasonal items, and other products.

However, not all grocery prices move in unison. While some categories may see price reductions, others may experience increases. 

In May, prices for soups, pork, snacks, poultry, fresh fruits, frozen and freeze-dried foods, cereals, and bakery products increased. Conversely, prices for milk, baby food and formula, cheese, fish, and eggs decreased.

Egg prices have fluctuated significantly since 2022 due to avian flu impacts. In May, the egg index declined by 0.4%, following a 7.3% drop in the previous month. Despite this, egg prices are still 3% higher than a year ago.

The latest CPI data shows that beef prices were 5.7% higher in May compared to the previous year, marking the largest annual increase among the analyzed grocery categories, despite a 0.3% decrease from April to May.