High Costs of Dining Out Keep Driving Up Food Prices

Your take on food prices right now probably depends on which receipt you’re looking at. For the fourth month in a row, average grocery prices didn’t rise, according to the latest consumer price index. But dining out keeps getting more expensive.

Overall, food prices — which includes both food at home (groceries) and restaurant purchases — ticked up slightly from April to May, according to the CPI report released June 12 from the Bureau of Labor Statistics. The CPI, which serves as a proxy for inflation, measures changes in average costs of items in a given period.

The report shows food prices are 2.1% higher than they were 12 months ago. By comparison, prices rose 6.7% over the previous one-year period in 2023. While inflation isn’t rising as fast as it once was, food still feels expensive. In fact, food prices have risen 26% since the start of 2020.

Here are the broad strokes on food prices found in the latest report:

Groceries: The index for food at home is 1% higher year-over-year. From April to May, grocery costs were unchanged.

Dining out: Restaurant patrons are still paying more (4%) for food than they did a year ago. And the price index rose 0.4% from April to May. Specifically:

• Limited service meals (takeout only) cost 4.5% more compared to the same time last year.

• Full-service meals (at sit-down restaurants) cost 3.5% more year-over-year.

Grocery prices continue to be a bright spot in the CPI. On the whole, they haven’t changed for three out of the past four months. In April, they declined slightly. That’s having a direct impact on people’s wallets: In May, several major retailers like Target and Walgreens touted summer discounts on pantry staples, seasonal favorites and other items.

But grocery prices don’t move uniformly. While they might be falling in one category or food group, they’re likely rising in another. This month was no different.

In May, average prices rose for soups, pork, snacks, poultry, fresh fruits, frozen and freeze-dried prepared foods and cereals and bakery products. They fell for milk, baby food and formula, cheese, fish and eggs, among others.

Egg prices have experienced huge swings since 2022, due to an avian flu. In May, the egg index declined 0.4%. That’s after dropping 7.3% the month before. But egg prices are still 3% higher than they were a year ago.

The latest CPI release shows beef prices were 5.7% higher in May than they were a year earlier — the largest annual increase among the grocery categories analyzed by NerdWallet. This despite falling 0.3% from April to May.