Food inflation leads diners to cheaper menu items

Consumers are still eating out, but instead of higher-priced entrees, many are ordering more entrees.

Like food inflation affordability New restaurant purchasing data dominating discussions about U.S. consumers shows that even among restaurant-going Americans, many are in the mindset of cutting back.

“Appetizer orders increased 20% year over year, even as appetizers and desserts remained largely flat or decreased,” said Jim Pazzanese, vice president of global strategic acquisitions. Buyers Edge PlatformTracking supply chain data in the food service industry. While sales of some popular entrees for restaurateurs are experiencing growth rates of more than 30%, “This shift can be seen at the product level,” he said.

The fastest growing appetizers

• Mozzarella sticks up 36%
• Pickle chips, 35% increase
• Curd cheese, 33% increase
• Jalapeno eggplants increased by 20%
• Cheese bites increased by 17%

Source: Buyers Edge, year-to-date data

Pazzanese calls the current restaurant scene the “appetizer economy.”

Meanwhile, he says dessert orders are down 2 percent year over year.

Pazzanese says one reason for the growing popularity of entrees is their connection to promotions, which are key to getting Americans to spend in the current economic climate.

“Consumers are realizing that appetizers are more tied to promotions and drink specials,” he said. “This makes dining out more affordable.”

He added that purchasing frozen or shelf-stable entrees, which are the fastest-growing appetizer SKUs, also makes economic sense for restaurateurs. “This helps owners and managers reduce waste and manage unpredictable demands,” Pazzanese said.

“The K-shaped economy we are seeing is reflected in food spending,” said Brian Choi, CEO of the Food Institute.

At the grocery store, he said, this is seen in the ongoing shift to private label brands as food inflation impacts consumer purchasing.

“The top 10 percent are increasing their spending on new products and are willing to pay, but the vast majority of consumers are turning to private labels rather than national brands,” Choi said. “Consumers can save 10 to 20 percent by switching to private label,” Choi added.

Consumer perception of private labels has increased significantly over the past five years and is now on par with national brands, according to a recent study by the Food Institute.

“Albertsons, costcoAnd Kroger “These are just a few examples of companies increasing shelf space for themselves,” Choi said.

“Save Mart launched a dedicated brand for beef, poultry and pork, and Amazon launched Amazon Grocery with many items under $5,” Choi said. “Albertsons believes private label could represent 30 percent of sales.”

Amazon launched its private label grocery store in October.

According to Food Institute data, although inflation has decreased from the high levels in 2022, food inflation remains stubborn.

“Food price inflation has increased since mid-2025, while home food prices have increased in the range of 1.9 percent to 2.7 percent on an annual basis,” Choi said. he said.

The latest consumer price index for September (the October report was not published due to the government shutdown and the November report was delayed) showed food prices increased by 3.1% year-on-year. Prices of meat, poultry, fish and eggs increased by 5.2% last year.

“We expect the private brand to grow further and will surpass national brands in 2026,” Choi said.

The September CPI showed “food away from home” inflation was even higher than overall food inflation: 3.7% and full-service meals at 4.2%. This is leading to more private label spending at restaurants, college and university cafeterias and grocery stores.

“The $1.5 trillion food away from home industry is turning to more private label brands to save money,” said Phil Kafarakis, CEO of IFMA, the Food Away from Home industry.

“Tariffs and supply chain issues have led to price increases, especially for perishable products,” Kafarakis said. he said.

The price cut is not expected to come anytime soon.

“Consumers don’t understand the food supply chain,” Kafarakis said. “It doesn’t get better within weeks.”

IMFA expects consumers to start seeing some price reductions in tariffs in the spring.

“Consumers don’t know how long it takes to produce beef, and if there is drought or other issues affecting the supply chain, it takes time to get the supply chain back on its feet,” Kafarakis said.