Outlook 2012: Menu prices will rise
Restaurant operators will increase menu prices this year, mostly between 1 percent and 3 percent, according to an exclusive survey by Nation's Restaurant News.
Facing a second straight year of rising commodity costs, many restaurant chains have said they will be forced to pass higher prices for food items to the consumer through menu price hikes.
From the coffee quick-service player Starbucks to the full-service Texas Roadhouse, chains are looking to test various levels of menu price increases in different markets. With today’s consumer still price sensitive, any upticks in the cost of menu items can affect a restaurant's traffic, so many chains are treading lightly.
According to the 2012 NRN Restaurant Operators Survey, results show a clear trend toward small percentage point menu prices increases.
With more than 150 respondents participating in the survey, about 67 percent said they would increase menu prices in 2012. Of those respondents, 64 percent cited an increase of between 1 percent and 3 percent. Also among those who said they would increase prices, about 31 percent said they would hike menu prices between 4 percent and 6 percent, while 6 percent said they would raise prices by more than 6 percent.
Just 2 percent of survey respondents said they would reduce menu prices in 2012.
Even with expected price increases, the majority of respondents cited “value pricing” as the most important aspect of the menu in 2012.
Respondents ranked their menu’s main focal points for the year:
1. Value pricing
2. Improved food quality
3. Use of local or seasonal items
4. Lower-cost food items
5. Bold flavors or spicy foods
NRN will explore more results from the 2012 NRN Operators Survey this week.
Part 1: Sales, profit, unit growth