Consumers face rising prices and smaller portions at restaurants

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Diners seem to be comfortable with menu changes, but the restaurant industry is still trying to figure things out

If you’ve eaten out at a restaurant lately, you may have noticed that there have been some menu changes – particularly with the prices of your favorite foods.

What began with a chicken shortage that came into play when the COVID-19 pandemic hit the U.S. has continued to shift over the last two years. Diners have seen everything from changes to food delivery to growing inflation and supply shortages caused by the war between Russia and Ukraine.

Restaurant Business reports that menu price inflation is at its highest point in 40 years, and it's consumers who are paying the price. According to Mazars’ Food and Beverage Industry Outlook, 78% of companies have passed at least some of their inflation costs on to customers, and 2% were able to pass on 100% or more.

Changing prices and portion sizes

In addition to higher menu prices, consumers are also getting less to eat when they dine out due to smaller portion sizes. For example, the U.S.’ biggest Burger King franchisee has reportedly cut down its portion sizes due to higher costs related to inflation.

“In some cases, restaurants are decreasing the portion size and trying to keep the price the same hoping they can hold out long enough until inflation starts to come back down. Other restaurant groups I’m aware of are just opting to break even or even lose money in the short term hoping that inflation comes back down,” James Philip, founder of growth strategies consultancy firm Daggerfinn, told ConsumerAffairs.

“It’s very tough out there right now. If you’re in the hospitality sector, you’re trying to figure out what to do over the next 6 to 12 months to not go bankrupt while also keeping hold of the customer base that you might’ve spent five or 10 years building,” Philip said.

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