According to new Labor Department data released Wednesday, this March, for the first time since mid-2021, the cost of dining at restaurants rose faster than grocery store prices on a 12-month basis.

According to the data, over the past 12 months, dining at restaurants has risen 8.8%, increasing for the third consecutive month, rising 0.6% over February’s reading. At the same time, grocery, or “food at home” prices have risen by 8.4% year over year, falling 0.3% from February’s reading.

Analysts note that the numbers may be a bad sign for the American restaurant industry, which was already having difficulty as consumers were cutting back on eating out, due to the effects of inflation and the cost of living crisis. Many restaurants have been increasing their prices in an effort to prevent drops in profit margins, however this has only served to reduce their business, as customers either reduced the number of times they eat out in response, or reduced how much they purchased to reduce costs.

Bruce Grindy, the chief economist of the National Restaurant Association, said however, that it is possible these numbers were skewed somewhat by the elimination of free lunch programs at schools which had been set up due to the Covid-19 pandemic. As those programs have ended, the costs of school lunches suddenly became much higher by comparison.

In a blog post, he wrote, “As a result, this price index rose sharply in recent months, which is putting upward pressure on the overall food-away-from-home index.” He said he expected this to continue complicating the food-away-from-home readings until the fourth quarter.

Verified by MonsterInsights