Increase in fast-food prices is moderated, albeit limited adjustments
In a recent report, the U.S. Bureau of Labor Statistics revealed that menu prices at both full-service and limited-service restaurants have seen an increase over the past year.
According to the data, limited-service restaurants have witnessed a 4% rise in prices over the past year, while grocers and other retailers saw a 2.4% increase in June and a 0.3% rise in the same month last year. On the other hand, full-service restaurants have experienced higher rates of inflation for food prices, with prices increasing by about 3.7–4.0% over the past year.
From February 2024 to early 2025, full-service restaurant menu prices increased 3.7% year-over-year, while limited-service prices increased 3.5%. By June 2025, full-service menu prices were up 4.0% year-over-year, slightly higher than the 3.5% increase for limited-service restaurants over the same period.
Despite these increases, both restaurant segments have seen a significant moderation compared to their previous peaks in 2022 and 2023, when full-service prices surged up to 9.0% and limited-service prices peaked at 8.2%.
It's worth noting that the menu price inflation remains notably higher than general grocery price inflation. For example, food prices at grocery stores rose by about 2.4% year-over-year as of mid-2025.
Economists are paying close attention to consumer prices due to potential increases from the Trump Administration's tariff policies, which could drive up the cost of imported goods, potentially affecting the cost of bottled wine, electronics, and other items.
Limited-service restaurants may be holding price hikes due to traffic challenges and a value war to attract customers. This trend reflects ongoing inflationary pressures balanced by consumer sensitivity and competitive market conditions.
In other news, consumer prices accelerated in June, rising 0.3% compared to 0.1% in May. Limited-service restaurants increased their prices by 0.5% in June, and stocks for restaurants were largely down on Tuesday.
[1] U.S. Bureau of Labor Statistics. (2025). Consumer Price Index - All Urban Consumers. Retrieved from https://www.bls.gov/cpi/ [2] National Restaurant Association. (2025). Restaurant Industry Overview. Retrieved from https://www.restaurant.org/research/industry-overview/
- The financial aspect of the restaurant business has been impacted by price increases, as both full-service and limited-service restaurants have seen significant menu price hikes over the past year.
- To sustain their businesses, limited-service restaurants are carefully managing their finances, withholding price hikes due to traffic challenges and a need to attract customers amidst ongoing inflationary pressures.
