• Discounts and special offers
  • Subscriber-only articles and interviews
  • Breaking news and trending topics

Already a subscriber?

By signing up, you accept Moneywise's Terms of Use, Subscription Agreement, and Privacy Policy.

Not interested ?

Rising food prices, declining foot traffic

O’Leary says many restaurants haven’t truly recovered from the effects of the pandemic — for one, customers have become a lot more comfortable with ordering their meals straight to their doorsteps.

And with the transition to remote or hybrid work, folks aren’t getting lunch with colleagues as often.

“This has been devastating to businesses that invested in brick-and-mortar locations,” O’Leary wrote. “Eateries in urban locations have been hit especially hard as their expensive locations are no longer receiving the footfall they need to meet rent.”

Lingering supply chain issues from the pandemic, he says, have contributed to the rise in food prices. According to the U.S Department of Agriculture (USDA), from 2019 to 2023, the all-food Consumer Price Index surged by 25% — higher than other major categories, including housing and medical care. Supply chain issues contributed to the increase in food prices in 2020-21, the USDA says, while an avian influenza outbreak and the conflict in Ukraine bumped up prices in 2022.

O’Leary adds that inflation is leading many consumers to tighten their wallets and pull back on discretionary spending.

“In this economy, an 'upscale McDonald's' is a luxury that many can't afford,” O’Leary wrote.

The richest 1% use an advisor. Do you?

Wealthy people know that having money is not the same as being good with money. WiserAdvisor can help you shape your financial future and get connect with expert guidance . A trusted advisor helps you make smart choices about investments, retirement savings, and tax planning.

Try Now

What options do they have?

O’Leary notes while some restaurants have had to scale back or even declare bankruptcy, others are moving to less expensive locations or turning into commercial kitchens that specialize only in takeout.

Other chains, like Starbucks and McDonald’s, are now offering patrons $5 meal deals in an attempt to draw consumers.

Still, financial advisers say this pullback on spending could be a good thing — at least for the Americans reining in their budgets and making smarter spending choices.

“Americans need to reprioritize their cash flow in difficult times,” Andrew Herzog, a certified financial planner and associate wealth manager at the Watchman Group in Texas, told MarketWatch.

“McDonald's and Starbucks will survive.”

Sponsored

This 2 minute move could knock $500/year off your car insurance in 2024

OfficialCarInsurance.com lets you compare quotes from trusted brands, such as Progressive, Allstate and GEICO to make sure you're getting the best deal.

You can switch to a more affordable auto insurance option in 2 minutes by providing some information about yourself and your vehicle and choosing from their tailor-made results. Find offers as low as $29 a month.

Serah Louis is a reporter with Moneywise.com. She enjoys tackling topical personal finance issues for young people and women and covering the latest in financial news.

Disclaimer

The content provided on Moneywise is information to help users become financially literate. It is neither tax nor legal advice, is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional. We make no representation or warranty of any kind, either express or implied, with respect to the data provided, the timeliness thereof, the results to be obtained by the use thereof or any other matter. Advertisers are not responsible for the content of this site, including any editorials or reviews that may appear on this site. For complete and current information on any advertiser product, please visit their website.