Cost Increases Causing Lunchflation



cost Increases causing lunchflation

The recent ‘lunchflation’ trend has been confirmed to be real by new research undertaken by payment provider Square.



Cost Increases Causing Lunchflation

The trend is causing problems for restaurant owners forced to raise their prices to cover increased costs. These costs are now being passed on to average business lunch eaters, whose numbers have risen dramatically since we returned to work after the pandemic.

Square’s researchers analyzed the sales data of popular lunchtime meals across the United States to understand how much consumers can expect to pay post-pandemic. The results confirmed what many working Americans have already experienced, and that is lunchtime food prices have risen significantly in recent months.

What is Lunchflation?

A recently coined term, lunchflation refers to the specific inflation of lunchtime food prices, such as sandwiches and wraps. It has gained a lot of attention recently as more people head back into the office following the pandemic. The running costs for restaurants and eateries have risen due to a variety of reasons, such as supply chains issues and shipping restrictions around the world.

Square themselves describe lunchflation as ‘lunch item costs rising faster than the average cost across all other items’. One example they gave is the 13% year-on-year rise in the average price of a wrap from March 2020 to 2022. They also note that the average price of tacos increased by 19%, rising from around $5.43 to $6.48. Burgers were up from $10.15 to $11.10, a rise of 9%.

It isn’t just fast food experiencing lunchflation either. The average price of a salad has increased from $9.44 in March 2021 to $10.32 as of March 2022, another rise of 9%. Soup prices have increased by a remarkable 28%, rising from $7.41 to $9.47 on average.



Causes of Lunchflation

The rising costs faced by restaurant owners has been identified as the reason for lunchflation. The likes of labor and meal ingredients have become more expensive, with the owners raising prices for the consumer to compensate. It is not just in America where this is happening either, with the lunchflation trend also happening in places like South Korea, where the overall price index for dining out in April 2021 has since jumped by 6.6 percent.

The Head of Restaurants at Square, Bryan Solar, said: “Restaurants have been among the hardest-hit businesses over the past few years, and now they’re facing rising costs across all parts of their business due to labor shortages and supply chain constraints. While technology offers many solutions, business from and relationships with the customer continue to be key to restaurants’ survival.”

Lunchflation Solutions

In response to their research results, Square made a number of suggestions that can help meet the challenge of lunchflation. These includes restaurants offering features like online ordering and self-serve ordering through QR codes, as well as local and flat-rate delivery through third-party partners. Such operational efficiencies as these can help restaurants make savings which they can then pass on to customers.

“In addition to being upfront and honest about why prices have changed, restaurants can lean on inventory management software to combat supply chain woes,” added Solar.



“Restaurants that also offer different ways of ordering, like tableside QR codes and pre-ordering online, can maximize sales by meeting customers’ preferences in how they purchase and pick up their items in cost effective ways.”

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Image: Depositphotos

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Gabrielle Pickard-Whitehead Gabrielle Pickard-Whitehead is a professional freelance writer and journalist based in the United Kingdom. Since 2006, Gabrielle has been writing articles, blogs and news pieces for a diverse range of publications and sites. You can read "Gabrielle’s blog here.".

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