Restaurant Prices to Jump in 2012
Fitch Ratings predicts food and beverage costs will jump for the second year in a row, driven to new heights in part by rising prices for both beef and chicken.
The cost of the protein staples increased by 9% and 5%, respectively, in the last year alone, according to the USDA.
Big-name franchises like McDonald's will weather rising prices the best, Fitch anticipates, given the company's stable financial footing in 2011 and the low-cost of managing franchise branches.
Its fellow fast food brethren can thank high unemployment rates in the U.S. for keeping wage inflation down and operating costs low, but not all chains are created equal.
Yum! (the company behind KFC, Taco Bell and Pizza Hut) is going to take a beating in the new year in the U.S., especially with new labeling regulations that list the nutritional content of menu items sending health-conscious consumers running. However, international consumers should pick up the slack. They are eating fast food more than ever in countries like China, the study says.
The same cannot be said for their linen cloth competitors.
Consumers are sniffing out the best values these days and ditching fancy restaurant fare in favor of cheaper limited-service restaurants, Fitch says.
From the December 13, 2011, Prepared Foods' Daily News.