Earlier this year, we brought up an argument that rising food prices could give restaurants an edge because the price gap between dining out and cooking at home had become narrower ( Kwok, 2022 ). It did not take long for the inflation to finally hit the restaurant traffic. Inflation in April almost hit the highest level in 40 years The Consumer Price Index (CPI) increased by 8.3% from 2021 ( Cox, 2022 ). Not only was it higher than Dow Jones estimation at 8.1%, but it remained close to the highest level since the summer of 1982. After removing food and energy prices, the core CPI still rose 6.2%, still higher than the anticipated level of 6%. Because of the record-high inflation, workers’ real earnings dropped 2.6% year to year despite that the average hourly earnings had increased 5.5%. The unexpected high inflation in April also cast doubts on the market about whether the inflation “peak” in March had really hit the ceiling. Restaurant traffic, especially drive-thru, drop
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