You May Begin Noticing More Deals Offered By Chain Restaurants

Spending more money on food these days is hard to avoid. Thanks to inflation and supply chain issues, grocery store prices are at an all-time high, and the prices at restaurants are starting to catch up. Restaurant Business reports that menu prices are at or near the highest they've been in 40 years, rising a record 8.7% in April alone. Menu items at Texas Roadhouse, for example, are 7.5% higher than last year, and Chili's anticipates its price will go up by 6%.

Unfortunately, making these changes to menu prices is one of the only things restaurant chains can do to keep up with higher wage rates and rising wholesale food prices. According to Restaurant Business, with cooking oil's cost up by 46% and fresh vegetables' prices rising to approximately 82%, profit margins are still suffering. Wyman Roberts, CEO of the restaurant group, Brinker International, noted to Restaurant Business that his company has been thoughtful regarding price increases, understanding the challenges that both the business and consumers are facing.

People are losing interest in eating out

With menu costs rising, people are less inclined to eat out. Data collected by global integrated sales and marketing services provider Acosta (via QSR) indicates that 54% of customers are opting to dine at home instead. To address the growing disinterest amid the higher prices, restaurants have no choice but to switch up how they attract customers.

"We understand the challenges with the inflationary pressure we're seeing but we also understand the importance of getting your pricing strategy right," Wyman said in an earnings call (via Restaurant Business). That strategy includes offering more promotions and deals that present value to both the customer and the restaurant. Wingstop, for example, began offering a boneless wings bundle when bone-in wings soared to $3.22 per pound (per QSR). Even with overall higher menu prices, customers still feel like they're getting a good deal while Wingstop doesn't have to stock up on the much pricier bone-in wings. QSR reports that Domino's similarly announced a 50% off promotion, and Chili's revamped its "3 for Me" menu. Chances are you'll be seeing more deals like these as moreĀ chain restaurants try to prove their value to customers who wouldn't otherwise eat out during the latest inflation.