Menu Prices Trending Higher in Restaurants

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TORONTO — Menu inflation in Canada trended higher in the first six months of 2015, primarily due to higher food costs, according to Restaurant’s Canada’s latest Restaurant Outlook Survey. Menu prices at restaurants rose 2.7 per cent between June 2014 and June 2015. During that time, prices jumped for beef (+18.4 per cent), pasta products (+10.6 per cent) and tomatoes (+6.4 per cent).

According to the survey, 66 per cent of respondents reported higher food costs in Q2 2015 compared to a year ago. Another 28 per cent said their food costs were about the same. The average table-service restaurant operator reported a 4.2-per-cent year-over-year increase in food costs in Q2 while quick-service restaurants saw food costs climb 3.8 per cent.

In addition to higher food costs, operators are paying more for labour, utilities and rent and these increasing costs are forcing some operators to raise their menu prices. More than half (56 per cent) of restaurant operators plan to raise their menu prices during the next six months. This is up from 50 per cent in the previous quarter.

Overall, annual menu prices at restaurants are projected to grow by 2.8 per cent in 2015 compared to 2.1 per cent in 2014. Looking ahead, Restaurants Canada is forecasting a 2.4-per-cent increase in menu prices in 2016 due to a moderation in food costs next year.

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