Menu Price Inflation Reaches 40-Year High

    A number of brands are turning to automation to mitigate costs. 

    Consumer Trends | January 12, 2022 | Ben Coley
    Inflation caution sign.
    Adobe Stock
    The price of quick-service meals jumped 8 percent, while full-service menu items lifted 6.6 percent.

    Menu price inflation in the U.S. soared once again as restaurants continue to grapple with cost pressures and the growing spread of COVID. 

    The food away from home index rose 6.5 percent in December year-over-year, the largest increase since January 1982. The previous 40-year high came in November, when inflation was 5.8 percent. The price of quick-service meals jumped 8 percent, while full-service menu items lifted 6.6 percent.

    The continued rise in food and labor costs have caused major disruptions at some of the biggest quick-service brands. Domino's CEO Ritch Allison said at the ICR Conference Tuesday that the pizza chain expects food inflation to be 8 to 10 percent in 2022, which is three to four times the normal amount. As a result, the brand is making its $7.99 carryout deal online only, and offering eight wings instead of 10 as part of the promotion. In Q3, the company noted restaurants suffered from a "very challenging" staffing environment that affected operating hours and customer service. 

    Meanwhile, other brands are combating labor shortages with more automation, both inside and outside the restaurant.

    Checkers and Rally's announced Monday that it's partnering with Presto to become the first hospitality brand to nationally roll out AI voice-ordering technology at its double drive-thrus. During test, Presto’s solution delivered order accuracy of more than 98 percent, with minimal intervention from employees. McDonald's is investing in the same type of technology, except with Apprente. The burger chain sold innovation hub McD Tech Labs to IBM to leverage the company's expertise and ignite development of automated order-taking technology.

    Also, in December, Jack in the Box revealed plans to test robots at its fries stations and implement automated drink machines and self-cleaning milkshake machines to reduce labor requirements in the back of house. 

    “These technologies are things that in our analysis can be fairly meaningful when we look at the unit economic model in the long-term and across the system as a whole as far as being able to reduce required average labor hours per week,”CFO Tim Mullany said during Jack's Q4 earnings call.

    Quick-service dining rooms are seeing the same type of innovation. BurgerFi is early into tests of Patty the Robot, an automated machine that serves meals to tables and returns trays to the kitchen. The robot is programmed to understand the restaurant layout and interact with customers. 

    "Patty may be the answer to employee shortages across the hospitality industry," Karl Goodhew, BurgerFi's chief technology officer, said in a statement. "By integrating automation with human operations, we give our employees the support they need and our guests the experience they crave. Our employees will always be the most important part of the guest experience, and robots allow them to continue to focus on great hospitality." 

    In the U.S. overall, inflation rose 7 percent in December, the biggest 12-month increase since June 1982.