Foodservice inflation is easing as the fast-food sector achieves price growth, according to the latest analysis from Meaningful Vision.
In July, the provider of data to the UK foodservice industry reported the decline of menu prices growth compared with the previous months. However, it said this impact has not been consistent across segments, with fast-food restaurants still maintaining higher price growth to their menus, while casual dining restaurants have maintained a more restrained approach. While the rate of price increases in the fast-food sector has substantially slowed in 2024, dropping from a peak of 14% to 5% in July, fast-food inflation still outpaces the overall food price inflation rate, which stands at 1.5%, according to the analysis. In contrast, casual dining restaurants have managed to keep their price increases to a more modest 3%, and while there is some variation among different subsegments (such as Italian and ethnic casual dining), the overall trend is one of more moderate price increases, it added.
“The intense competition within the industry has made it difficult for brands to pass on significant price increases to consumers”, said Meaningful Vision chief executive, Maria Vanifatova. “Additionally, as consumers become increasingly price-sensitive, fast-food restaurants have been cautious about alienating customers with excessive price hikes. There are several explanations as to how and why casual dining restaurants maintain a lower pricing growth. One key factor is higher menu flexibility, allowing casual dining restaurants to adjust their offerings to accommodate variable costs. Additionally, casual dining restaurants have fewer promotional opportunities compared with fast food, which contribute to the ability for them to keep core menu price increases at a slightly higher level.”
