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Consumers going out to restaurants are finding higher prices these days as operators charge more for their menu items in a bid to make up for rising labor costs. Menu prices, or food away from home prices, rose 0.6% between April and May, according to the latest consumer price index data from the U.S. Dept. of Labor. Prices at restaurants are up 4% on an annual basis. The rate of menu price inflation was lower than the overall rate of inflation, which was 5% last month on an annual basis. That was the largest 12-month increase since August 2008. Menu prices have been rising since last summer when consumers began flocking to fast-food drive-thrus and ordering delivery and operators paid higher prices for labor and charged consumers accordingly. But for most of that time, it was the limited-service sector leading the charge, as demand for those meals and consumers’ willingness to pay them led to higher charges. Yet prices at full-service restaurants rose 4.1% annually in May, according to the Labor Dept., which said that it was the highest rate of annual growth for that sector since October 2018. The numbers suggest that full-service restaurants are taking their charges higher as operators face higher labor costs as they fill open positions to meet rising demand. Sales at full-service restaurants have largely recovered in the past three months as consumers, with cash to spend, have filled seats at independent eateries and casual dining concepts. All that said, fast-food restaurants continue to push prices higher. Limited-service restaurants have raised their prices by 6.1% over the past year. – Source: Restaurant Business.

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