Inflation is slowly decreasing, and this is also reflected in restaurant menu prices. While consumer prices were 2.6% higher in October compared to the previous year, the increase was lower than previous months. The prices of food purchased away from home only rose by 0.2% from September to October, as restaurants are easing up on price hikes. Many operators have not raised prices in the past year, showing increased optimism in the industry.
Despite this, dining out is still more expensive than a year ago, with costs up 3.8% in October compared to the previous year. Quick-service restaurants have been quicker to lower prices compared to sit-down restaurants, as they face competition and pressure from budget-conscious customers. Overhead costs may also influence pricing decisions, with quick-service restaurants benefiting from slower growth in labor costs.
As President-elect Donald Trump is expected to raise tariffs, it remains to be seen how menu prices may be affected next year. Experts predict that the impact may be more significant on retail goods rather than food, as the U.S. imports a smaller percentage of its food supply. However, the potential for higher prices on certain food items like wine and avocados is causing concern in the industry. Ultimately, the extent of tariff impacts on food prices will depend on the actions of the incoming administration and Congress.
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