Inflation’s impact on the food and restaurant industries
As inflation hikes up the prices of raw food ingredients for restaurants, eating out is getting more expensive for consumers.
Menu pricing across the restaurant industry has been accelerating rapidly since last year. Coffee has seen the most significant growth with >12% increase in July 2022 YoY. This increase is just ahead of pizza, up >11% YoY, and fast casual, up >9% YoY.
Menu Pricing YoY Growth by Segment*
United States | June 2021 - July 2022
*Note: CPI FAFH Index refers to the Consumer Product Index Food Away from Home component
This price increase coincides with decelerating demand for food delivery, resulting in reduced YoY growth for most segments in third-party delivery. Fast casual 3P digital sales, for example, only grew ~10% in July 2022 YoY vs ~22% last year.
The only exception here is the pizza segment, up 98% in 3P digital sales YoY. This growth is mainly due to Pizza Hut’s recent adoption of third-party delivery services to attract new customers.
3P Digital Sales YoY by Segment
United States | July 2021 - July 2022
As prices rise, the share of restaurant industry sales from low income (<$45K) consumers has declined in 2022 YoY. ~40% of sales in July came from high income consumers (>$100K) who can withstand high prices.
Industry Sales Share by Consumer Income Level*
United States | July 2021 - July 2022
*Note: We have adjusted our transaction panel for income bias by applying income weights based on census data in an effort to show a more representative weighted mix of sales by income bracket.
Sources: Email receipt data, transaction data, receipt data, Consumer Product Index
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