Restaurants across the nation are cutting specific promotions and reworking menu specials amid record inflation levels.
Food prices were up 7.9 percent in February compared to one year ago, and March’s numbers are expected to continue the upward trend when they are released Tuesday.
After one year’s worth of rising inflation, consumers across the country are swapping expensive items for cheaper counterparts, causing retail stores and restaurants to rethink their sales and menu deals.
In January, Beef ‘O’ Brady’s CEO Chris Elliott removed the restaurant’s renowned surf and turf special from the menu after seeing signs that consumers were being impacted by rising inflation.
“People are looking for deals; they’re getting hammered everywhere — at the gas station, at the grocery store,” Elliot said.
President Joe Biden pauses to answer a question from a reporter after he spoke about strengthening the supply chain with improvements in the trucking industry, on the South Lawn of the White House in Washington, Monday, April 4, 2022. (Andrew Harnik/AP)
As Bloomberg News reported:
But in January, Chief Executive Officer Chris Elliott saw signs that consumers were feeling the squeeze of soaring inflation. So he took the $12.99 surf-and-turf dish off the specials list, replaced it with a fish-and-chips platter and slapped a $9.99 price tag on it. Even with the change, though, customer traffic has been flagging in recent weeks.
Another example of inflation’s impact is the popular restaurant chain Denny’s, which promotes a $6.99 all-you-can-eat pancake, eggs, and hash brown breakfast. Although their breakfast special is $6.99, the same deal is $8.99 in states with a higher cost of living. In both markets, the restaurant charges an additional .99 cents for bacon.
On the other hand, Friendly’s Restaurant CEO Craig Erlich is hopeful his company will not have to increase prices. Unlike Denny’s or Beef ‘O’ Brady’s, Friendly’s promotes larger portions and utilizes more discounts than in the past.
“That’s why we’re being mindful about not increasing prices significantly like we’ve seen out there. It’s really a tough balance we face,” Erlich said.
Restaurant price increases are a significant reason why the average U.S. household will spend an additional $5,200 this year for the same exact products as last year.
Although Target had more sales growth than Walmart during the pandemic, during which U.S. families received multiple stimulus checks, Walmart has been making recent strides to close the gap.
“But sales gains at Walmart have been stronger in recent months, according to Bloomberg Second Measure, which analyzes U.S. consumer transactions to measure revenue,” Bloomberg reported. “That suggests shoppers are increasingly drawn to Walmart’s mantra of everyday low prices.”
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