Earlier this year, Foodservice IP published blog posts about how rising fuel prices would affect foodservice. We even covered some creative approaches to the issue, such as how Sheetz used fuel discounts to drive foodservice business.
In mid October, the Department of Labor released September’s inflation data. While fuel prices have decreased in the past few months, both food and fuel prices are rising faster than the economy as a whole. In addition, prices of “food away from home” (i.e., DOL’s term for foodservice prices) are going up faster than “food at home”.
While this will, of course, affect menu prices, not all segments are affected equally. Many restaurants are hesitant to increase prices as they monitor consumers’ willingness to pay. Other operators, however, do not have that option.
According Restaurant Business, “Driving higher food-away-from-home prices has been the end of many free school lunch programs that have sent prices at schools and employee sites soaring. Those prices rose 45% in September and 91% over the past year.”
Between the elimination of pandemic-era universal free lunch, Great Recession-driven wage gains which increased incomes on paper, and inflation—which erased those income gains—more families are being excluded from free and reduced lunch programs even though they cannot afford to pay full price. This forces families to choose between going into debt or allowing their children to go hungry.
Food and fuel prices are intertwined, and inflation in those categories will have a profound impact on both the foodservice industry and all consumers. But as the past few years have taught us, hardship and disruptions do not affect all people equally. At Foodservice IP, we will be monitoring how school foodservice operators respond to these challenges and sharing promising approaches as we identify them.
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