Menu prices rose 5.4% during the last 12 months
Growth in menu prices continued to slow in October, according to data from the Bureau of Labor Statistics (BLS). The Consumer Price Index for Food Away from Home increased 5.4% between October 2022 and October 2023. That represented the seventh consecutive month of decelerating growth and the smallest 12-month increase since October 2021.
The slowdown in grocery price growth was even more pronounced in recent months. The Consumer Price Index for Food at Home rose just 2.1% between October 2022 and October 2023 – the smallest 12-month gain since June 2021. The recent moderation was a sharp departure from a year-long period of double-digit gains – including a peak 12-month increase of 13.5% in August 2022.
Even though grocery store prices slowed significantly relative to menu prices in recent months, they still posted stronger growth since the beginning of the pandemic. Between February 2020 and October 2023, grocery store prices were up 25%. That was slightly above the 24% increase in menu prices during the same period.
Overall consumer prices increased 3.2% between October 2022 and October 2023, which was down from the 12-month gains of 3.7% in both August and September. The core CPI (which excludes food and energy prices) increased 4.0% between October 2022 and October 2023. That was the seventh consecutive month of decelerating growth and the smallest 12-month increase since September 2021.
Within the food-away-from-home sector, growth in limited-service menu prices outpaced the fullservice segment in recent months. Prices for limited-service meals and snacks increased 6.2% between October 2022 and October 2023. That was down from the recent peak of 8.2% in April, which represented the strongest 12-month gain since the beginning of this data series in 1997.
Fullservice menu prices rose 4.3% between October 2022 and October 2023. That was well below the 9.0% gains posted during 2022 and represented the smallest 12-month increase since July 2021.
Elsewhere in the food-away-from-home sector, the price index for food from vending machines and mobile vendors jumped 14.9% between October 2022 and October 2023. That represented the 13th consecutive month of double-digit gains on a 12-month basis.
The price index for food at employee sites and schools increased 5.4% between October 2022 and October 2023. This component had been significantly dampened for much of 2021 and 2022, which BLS attributed to widespread free school lunch programs. As these programs expired, many students went from paying nothing to paying regular prices for school lunches. That resulted in sharp year-over-year increases in this price index during the past year. These base effects are now running their course, which will result in a normalization of this price index as well as its outsized impact on the overall Consumer Price Index for Food Away from Home.
On a regional level, the West (5.7%) and South (5.7%) regions posted the strongest menu price increases between October 2022 and October 2023. Average menu prices in the Northeast (5.1%) and Midwest (4.6%) region rose at rates below the national average during the last 12 months.