Why Are Restaurant Prices So High? And Why You Can’t Do Anything About Them
November 11, 2024 | 1 min to read
In 2024, dining out has dramatically changed, with a typical three-course meal costing around $100, reflecting increased prices in the industry. A 16-ounce strip steak that was $50 five years ago is now priced at at least $65 for a smaller portion, and martinis have risen from $15 to over $20. This rise isn't due to gouging; instead, restaurants face rising food costs exceeding 40%, necessitating incremental price increases on menus.
Before Covid hit the restaurant industry, if you spent $100 for a three-course meal including a beverage at a mid-level restaurant, it seemed an extravagance. Now, in 2024, you’d be lucky to find any that don’t cost that much and much more.
A 16-ounce strip steak that cost $50 five years ago you’d be lucky to find now for under $65—and it will only be 14 ounces. And the $15 Martini is now north of $20. What is going on?
Well, it’s not gouging: Restaurants considered a ten percent profit a reasonable rate of return when food costs were in the stratum of 25% to 35%. Now it’s tough for restaurants to keep them below 40%. That has to be passed along on a menu but only incrementally. No one’s going to pay double for a bowl of onion soup that used to cost $8.
To read the rest of the story, please go to: Forbes