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Prices at your local restaurant could soar by 28%

UK restaurants are hiking menu prices to cover business costs. But will consumers stomach further rises?

According to a new report by global credit ratings business Morningstar DBRS, the UK has seen some of the biggest menu price increases in the world.

Data supplied by restaurant.org shows that average prices at major national restaurant chains in the UK increased by an average of 20% between the third quarter of 2023 and the summer of 2024.

Such increases have been necessary to counter higher food, energy and wage costs shouldered by businesses, and so far diners have been willing to stump up the extra cash to continue eating out. According to trade association UKHospitality, venues still experienced growth, albeit modest growth of 1%, in the third quarter of 2024.

However, prices are expected to climb higher still in 2025.

The only way is up

UKHospitality estimates that its 740 members will need to increase their prices by an additional 8% this year to cover the UK Government’s incoming national insurance increase for employers. This could mean a potential total price hike of 28% on restaurant menu items since mid-2023.

What does this mean in real terms? If your stone-baked pizza used to cost £14, you could soon be forking out £17.92 for the same dish.

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Keeping with the Italian theme, if a two-scoop portion of gelato used to cost £6, it might set you back £7.68 this year.

Continued menu price hikes are likely to negatively impact footfall.

“We expect it to be very challenging for restaurants to implement further meaningful price increases without sacrificing considerable volumes,” the report by Morningstar DBRS states.

Morningstar’s research suggests it will become increasingly difficult for restaurant operators to pass on menu prices “as budget-conscious consumers continue to pare back discretionary spending.”

Consequently, establishments may need to choose between having bums on seats or fewer covers with higher menu prices.

 

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