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Inflation finally hit restaurant traffic

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, dropped significantly in April


Data has shown that restaurant traffic in April dropped 9.4% from the 2021 level (Kelso, 2022). Notably, the continuously rising and record-breaking gas prices likely have substantially discouraged people from driving. Drive-thru traffic for restaurants was down by over 13%, whereas dine-in patrons recorded an increase of 2.4%. 


Because many restaurants had raised menu prices to offset the inflation of “everything,” restaurant sales did not get hit as much as the store traffic. Nonetheless, it seems that consumers had reached a threshold that they would cut restaurant visits and spending. 


It is uncertain that less foot traffic in restaurants would help ease the industry’s labor shortage challenge. Drops in traffic for sure worried many restaurant owners and operators.  


How concerned are you about the inflation’s effects on restaurant traffic and sales? 

Note: This article is first published in the Hospitality News Magazine. The picture was downloaded from


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