Throughout 2022 and 2023, many of us lamented the rising costs of food. Our grocery bills went up. The price of a restaurant meal seemed to skyrocket overnight. Eating is simply more expensive these days.

When the COVID-19 pandemic went global in 2020, virtually every supply chain was affected. Naturally, this drove up prices for everything from cars and trucks to milk and eggs. But, even when the price dropped on other goods, food costs stayed high. Buyers continued to pay 5% to 32% more for basics, such as butter and eggs, well into 2022 and beyond.

Restaurants have been affected, too. The average restaurant bill is up about 6%. And many diners—34%—are switching from fast-casual to quick-serve to save money. But even this isn’t a surefire strategy. 86% of restaurants in the “quick service” category hiked their prices in 2022.

Why is food still so expensive?

There are several reasons why food prices are still so high:

    • Labor. The COVID-19 pandemic had a dramatic impact on the hiring market and worker expectations. Grocery stores, restaurants, and their suppliers have no choice but to pay their workers more. Those costs are reflected in the final price tag.
  • Production costs. The United States Department of Agriculture (USDA) has predicted that the cost of food production will increase by 4.1% in 2023.
  • Natural disasters. The COVID-19 pandemic wasn’t the only disaster that rocked supply chains. Droughts and wildfires have devastated crop yields in the western United States. When supply goes down, demand—and prices—go up.
  • Human conflict. Ukraine has been dubbed “the breadbasket of Europe.” The country produces roughly 9% of the world’s wheat and 12% of its corn. Wartime has severely limited its export capabilities, leading to supply shortages and, of course, price hikes.


Unfortunately, we’re probably in for another year of expensive eating. The USDA has already stated that food prices are likely to continue to rise well into 2024. “Food-at-home” prices are likely to increase by 2.1%. “Food-away-from-home” prices will go up by 5.1%.

What can your RDS do about high food prices?

Unfortunately, restaurant dining and delivery is one of the first places people cut back when money is tight. But that doesn’t mean your RDS is doomed. We’ve written before about ways to handle inflation in the food industry, but there are other strategies to consider.

    • Offer a range of price points. As we mentioned above, not all customers are skipping out on restaurant food altogether. Many are simply switching to cheaper dining and delivery options. You can leverage this by offering delivery options at multiple price points. This allows your customers to still indulge, while saving a few bucks. 
  • Offer coupons and discounts. Coupons and discounts are a great way to make a restaurant meal seem more affordable. Of course, you don’t want to get carried away and give up your entire profit margin. But a few strategically employed coupons can tempt even your most budget-conscious customers to place an order.
  • Ask your restaurant customers what their biggest earners are. Some restaurant owners weather inflation by loading up their menus with items that cost less to make. This allows them to protect their profit margins without having to raise prices as much—or at all. These menu items can be great candidates for coupons and promotions.

Control your own costs.

Inflation of any kind can be challenging for your RDS. One way to stay in control of your finances is to manage your own costs. That’s why DataDreamers uses a transparent, predictable pricing model. We understand the pain of getting hit with an unexpected bill—and vowed that we’d never do that to you. When you choose DataDreamers, you can build your software costs right into your pricing. The result is better control over your spending—and better revenue.

To see DataDreamers in action, schedule a demo >