Restaurants Bear the Brunt of Rising Supplier Costs

As inflation rises across all links of the supply chain, restaurants are challenged to contend with ever-rising costs for ingredients and supplies.

By the Numbers

Research from PYMNTS’ study PYMNTS study “Main Street Health Q3 2022: SMBs Battle Inflation,” which draws from a July survey of 533 U.S. businesses, finds that the clear majority, 62%, of businesses in the hotels, restaurants and entertainment sector have experienced rising costs from suppliers.

Get the study: Main Street Health Q3 2022: SMBs Battle Inflation

What They’re Doing About it

While 56% of these businesses reported that they have raised consumer prices in response, they nonetheless appear to be absorbing much of this inflation in an effort to keep customers coming back.

In fact, findings from August’s Consumer Price Index for All Urban Consumers (CPI-U), reported by the U.S. Bureau of Labor Statistics (BLS) Tuesday (Sept. 13), revealed that food prices overall increased 11.4% year over year, while restaurant prices rose only 8%, indicating that restaurants are taking the hit for their customers. In contrast, grocery prices rose 13.5% in the same period.

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