Skip to content Skip to navigation

Food prices are dropping. Restaurant prices aren’t.

The United States is awash in pork, beef, eggs, milk and bountiful harvests. U.S. meat companies are producing nearly 5 percent more beef than in 2015, thanks in part to plentiful feed supplies. In turn, the big food producers like Cargill, are seeing profits rise. The Minnesota conglomerate recently reported a 66 percent jump in profits because of demand for its steaks and hamburgers.  And yet the boom in supply is driving down prices at the grocery store, pinching retailer profits. The pressure may build with this week’s news that online retailer Amazon.com is opening a string of brick-and-mortar stores for its Fresh line of groceries. But while food price deflation may be good news for grocery shoppers, it’s having a boomerang effect on the restaurant industry, which is seeing other costs rise at the very time demand is flattening because folks are opting to cook at home instead of hitting the local steakhouse or fast-casual restaurant. Even demand for McDonald’s venerable gut-buster Big Mac is wheezing.

Article Link: 
Article Source: 
The Washington Post
category: