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As Food Prices Rise, Expect a Higher Check When Dining Out

Restaurants are paying more for food. When you dine out, so will you.

With COVID-19-related lockdowns easing across the U.S., millions of stir-crazy Americans will head out to local diners, cafes, taverns, and high-end eateries this weekend - if only to have someone else serve them a meal.

No judging here at KTE - the bride and I did the same ourselves last weekend here in beautiful Bucks County, Pa., at a local eatery with patio seating. The steak was hot and the beer was cold, and a good time was had by all - until the check came.

Maybe it was the three Labatts - hey, we said no judging - but the check amount was higher than we remembered, having dined at the establishment many times before. Some quick tapping on my mobile budget app found that, indeed, the check was higher - about 20% higher - than previous visits.

Still, happy to be out enjoying ourselves and delighted to support a local business that had largely been closed for three months, we paid the check and hit the bricks. The next day, I thought nothing of it.

Then I saw a note in my email box from Buyers Edge Platform, a restaurant service provider that uses smart technology to help eateries improve their supply chains to manage expenses.

In the email, BEP noted that restaurants in the United States "saw the price for the food and other products they buy soar 38% since the global pandemic started, adding insult to injury as those price increases came as business plummeted."

Buyers Edge Platform looked at $1.3 billion in purchases restaurants made in February 2020 and May 2020 and compared the prices restaurants paid for items between those dates.

Overall the prices paid for all items were up 38% in that time period.

BEP offers a breakdown of some of the price changes for some of the most popular items on the menu at restaurants nationwide:

Beef Products

—Standard beef cuts up 86.82% per case from February to May

—Fresh ground beef patties up 80.77% per case

—Frozen ground beef patties up 27.97% per case

Poultry Products

—Chicken Breasts up 23.46% per case from February to May

—Chicken segments (legs, wings, thighs, breasts) up 18.44% per case

Pork Products

—Standard pork cuts up 70.28% per case from February to May

—Bacon products DOWN 13.21% per case

Other Products

—Prepared Sandwiches, up 181.33%

—Yeast, up 60.94%

—Bread & Rolls, up 20.86%

—Prepared salads, up 50.64%

BEP executives aren't exactly sure why prices rose - they just know that prices rose.

“It can be hard to pinpoint one exact cause for the general rise in prices for items restaurants bought so far during the pandemic,” said Buyers Edge Platform CEO John Davie.

“Demand for all items was certainly down across the board as restaurants in every sector saw a dramatic drop in orders," he added. "We think there were a number of factors that led to issues with supply, which led to the higher prices."

First, U.S. production was simply shut down, which triggered an edibles shortage.

"Meat processing plants sat empty which meant there were some items that were just harder to come by," Davie said. "When the meat processing plants did open, social distancing was implemented, which meant fewer employees on the floor of the plants. That slowed down production by 35 to 45 percent."

Second, BEP found many food products were diverted from the restaurant industry to the grocery industry. 

"As shoppers rushed to fill up their fridges and pantries at home, grocery stores had trouble keeping some items stocked, so manufacturers diverted some items from the restaurant supply chain and moved it over to the grocery supply chain," Davie added. "That caused prices to go up for the restaurants."

Clearly, Davie is on to something big coming out of the pandemic for foodies, tavern-hoppers, and other dining denizens - the cost of your next meal out may be higher than you expected.

Maybe a lot higher.