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Menu prices continued to climb in May

  • Alicia Kelso
  • 11 June 2025
  • 2 minute read
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This article was written by Restaurant Hospitality. Click here to read the original article

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The consumer price index rose 0.1% in May, putting the annual inflation rate at 2.4% — less than economists expected, indicating that tariffs haven’t yet had a significant impact on inflation. According to federal data released Wednesday morning, lower energy and gas prices helped offset most other increases.

Food prices, however, increased 0.3% month-over-month and 2.9% year-over-year. This comes on the heels of April’s reading, in which food prices fell by 0.1%. May’s readings were driven by higher prices at the grocery store — with food-at-home costs ticking up 0.3% on the month and 2.2% on the year. Stubbornly high egg prices fell 2.7% but remain up 41.5% versus May 2024.

Meanwhile, restaurant prices rose 0.3%, which marked the lowest month-over-month increase since January. Year-over-year, however, menu prices remain well above the general CPI, at 3.8%.

Both full-service and limited-service prices increased 0.3% over the month. For limited-service establishments, May marked the second consecutive month of 0.3% growth, while full-service prices showed signs of cooling after back-to-back increases of 0.6% in March and April, according to the National Restaurant Association.

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Full-service menu prices rose 4.2% versus May 2024, while limited-service menu prices rose 3.5% over the same period.

Related:Menu prices increased in April for the third month in a row

According to Kalinowski Equity Research, May marked the 26th month in a row in which menu prices outpaced grocery prices. The gap between grocery inflation and restaurant inflation, however, decreased by 30 basis points during the month. That said, they remain 160 basis points in favor of grocery stores, while the historical average is a 70-basis-point gap in favor of grocery stores.

Kalinowski Equity Research president and chief executive officer Mark Kalinowski notes that restaurant same-store sales have been sluggish because of this wider-than-average gap.

“Things have improved relative to 2024,” he wrote. “However, the gap in favor of grocery stores/supermarkets is still roughly twice as large as the 23-year historical average. All in all, this dynamic suggests that inflation is likely weighing on restaurant industry sales trends to some degree. In our view, this probably will continue to happen over the remainder of 2025.”

There is some positive news in that menu price inflation has eased significantly compared to 2022 and 2023. The National Restaurant Association notes that full-service prices peaked at 9% year-over-year in 2022, for instance, while limited-service prices peaked at 8.2% in April 2023.

Related:Menu prices increased in April for the third month in a row

“Compared to the last 1 to 3 years, inflation is gradually becoming less of a problem for the U.S. restaurant industry as a whole,” Kalinowski wrote. “So, while the current dynamic isn’t favorable for restaurants, it isn’t the largest challenge facing the restaurant industry and its sales trends, either.”

Contact Alicia Kelso at [email protected]

Please click here to access the full original article.

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