The Price Gap: How Restaurant Prices Have Outpaced Grocery Costs

According to recent statistics, restaurant dining has become a luxurious indulgence for many consumers due to skyrocketing prices. In March of 2023, restaurant costs have surpassed grocery costs, marking a reversal of a previous trend where grocery prices rose at a faster rate than restaurant prices. Rising labor costs represent one of the main reasons for the surge in restaurant prices. Many states have increased the minimum wage, while healthcare and employee benefits costs have also surged, leading to higher expenses for restaurant owners. Consequently, restaurant owners have transferred these costs to their customers via increased menu prices.

Real estate prices have also played a critical role in the burgeoning cost of eating out. Prime restaurant locations are becoming increasingly expensive, with landlords charging higher rents to compensate. Restaurant owners have to charge more for their food to cover these high rent costs. The supply chain disruptions resulting from the pandemic have also contributed to increased restaurant prices. The cost of raw materials and ingredients has skyrocketed, making it more expensive for restaurants to source their products. Furthermore, due to the shortage of truck drivers, transportation costs have risen, leading to higher prices for delivery.

Restaurants are encountering a challenging balancing act as they endeavor to maintain profitability while meeting consumer demand. They may need to consider innovative solutions such as adjusting menu offerings, increasing efficiency, and exploring new revenue streams to remain competitive in a challenging market. All these factors combined have led to a significant increase in restaurant prices compared to grocery costs. For consumers, this means that dining out has become less affordable, while cooking at home has become a more cost-effective option.

Dashy Dash offers solutions for restaurants by alerting them to price changes for products they already purchase, enabling them to make more informed purchasing decisions and save on costs. These tools will be necessary in the future to remain competitive and possess actionable data that will produce results.

In conclusion, the trend of rising restaurant costs is expected to continue. To remain competitive while maintaining quality and service, restaurant owners must devise creative strategies. For consumers, changing dining habits by cooking at home more frequently may save them money. Ultimately, Dashy Dash is aligned with the restaurant's interest and has become a valuable asset to combat price increases and improve the bottom line.

About Savor

Savor helps restaurants, restaurant groups, and chains of all types control supply costs with less work.

With Savor restaurants can manage invoices, track product price histories, and drill down into expense categories. We help restaurants...

  • Automatically catch rising prices before they spin out of control
  • Benchmark prices for supplies against those paid by similar restaurants and bars
  • Easily find alternative products and suppliers in their area
  • Capture credits by automatically auditing invoices for errors

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We're the fastest way for restaurants to uncover supply savings.

Savor helps restaurant businesses uncover new ways to save through operational insights, product price benchmarking, and more. If you're a founder, store operations, FP&A, or supply chain professional, we're for you.