As Grocery Prices Drop, Restaurants Face Pressure to Cut Menu Prices for Budget-Conscious Diners

Grocery prices are falling faster than restaurant prices, putting pressure on chains to cut prices. Food at home inflation fell to 1.2% in January, while eating out rose 5.1%.

Customers are tired of perpetual restaurant price hikes. Chains like McDonald's boosted profits with 10% price hikes in 2022.

Lower income consumers are spending less at restaurants. McDonald's admits those earning under $45k are cutting back.

Parent companies of top chains like KFC and Pizza Hut reported disappointing sales, attributed partly to prices.

Grocery stores like Walmart and Kroger are keeping food prices down, while restaurants may simplify menus and make food more affordable.