Menu Prices

Consumer prices jumped 0.6% in April, building on the 0.9% increase seen in March. These gains were largely due to higher gasoline prices, which were up 21.2% in March and 5.4% in April amid significantly reduced traffic through the Strait of Hormuz. Food prices rose 0.5% in April after being unchanged in March, led by higher sharply higher grocery store costs. Headline inflation increased 3.8% year-on-year in April, up from 3.3% in March and the highest since May 2023.

Core CPI, which excludes food and energy, rose 0.4% in April following 0.2% gains in the two prior months, and core inflation increased from 2.6% year-over-year in March to 2.8% in April, the highest since September.

Notable increases included apparel (+0.6%), shelter (+0.6%) and transportation services (+0.3%). At the same time, prices for household furnishings and supplies (-0.5%), medical care commodities (-0.4%), and new vehicles (-0.2%) were lower in April, with prices for medical care services and used cars and trucks unchanged.

Inflationary pressures accelerated in April, as expected, with prices likely to continue trending somewhat higher in the near term. This places the Federal Reserve in a difficult position. The labor market continues to show signs of cooling, yet inflation remains stubborn and appears poised to drift higher. As a result, the Federal Open Market Committee is likely to hold policy steady for the foreseeable future.

Grocery price growth outstripped menu prices in March and April

Menu prices edged up 0.2% in April for the second consecutive month, matching the average monthly gain so far this year in the restaurant sector. On a year-over-year basis, menu prices are up 3.6% from April 2025, the slowest pace in 15 months. Overall, restaurant price inflation remains relatively mild and well below the 8.8% peak reached in March 2023, which marked the fastest increase in more than two decades.

By comparison, grocery prices have shown firmer momentum in early 2026, rising 0.7% in April and averaging a 0.4% monthly increase year to date. Over the past 12 months, food-at-home prices have climbed 2.9%, accelerating from 1.9% in March and reaching their highest rate since August 2023. As a result, the gap between grocery and restaurant price inflation has narrowed notably—an important dynamic for the industry as consumers weigh whether to dine out or eat at home. 

In the food away from home category, menu prices grew 0.4% at limited-service establishments in April, up from 0.2% in March and the highest since December. Fullservice menu prices inched up 0.1% in April, slowing after 0.3% gains in each of the previous two months. Limited-service menu prices have averaged 0.3% growth per month through the first four months of 2026, with fullservice menu prices averaging 0.2% per month year to date.

Inflation in both segments has moderated significantly from earlier peaks: full-service restaurant prices surged as high as 9.0% year-over-year in 2022, while limited-service prices peaked at 8.2% in April 2023.
 

Within the broader food-away-from-home category, prices at employee sites and schools rose 0.2% in April, with food prices from vending machines and mobile vendors edging up 0.1%. Menu prices for other food away from home slipped 0.1% in April after rising solidly in recent months.

Year-over-year, prices at employee sites and schools rose 4.0% since April 2025, with prices at vending and mobile vendors up 2.0%, the slowest pace since December 2024. The broader “other food away from home” category posted a 4.8% annual increase in prices in April year-over-year.     
    

Regionally, menu prices grew 0.3% in the Midwest and South in April, with 0.2% in the West and 0.1% in the Northeast. Over the past 12 months, restaurants in the South had the fastest menu price growth at 3.7%, followed by year-over-year gains of 3.6% in the South and 3.4% in both the Northeast and the West.