Costing More To Eat Out?

Costing More To Eat Out? Post-Katrina energy woes mean consumers could also see menu prices go up, analysts say. Effects from Hurricane Katrina, gas and energy prices have worsened the environment for the nation's restaurant industry, analysts cautioned. “Menu price inflation has heated up,” cautioned Hudson Riehle, senior vice president of research with NRA. Year-to-date until July, Riehle said menu inflation is up 3.2 percent. “Typically, menu price inflation tracks between 1 to 3 percent a year,” he said. “People are being pressured at the pump. One of the first areas where they cut back is on eating out less often,” said Jill Eft, an analyst with Avondale Partners. A survey conducted in late August by market research firm Technomic showed that 18 percent of consumers polled said they had reduced their spending in quick-service restaurants such as McDonalds because of higher fuel costs. About 19 percent said they are cutting back spending at full-service restaurants. The National Restaurant Association (NRA) estimates a limited impact from Katrina, per se, to overall impact industry sales of $476 billion. Annual restaurants sales for Louisiana, Mississippi and Alabama -- which together account for 6,800 restaurants and other food service outlets -- last year were about $12.4 billion, or a very modest 2.6 percent of the national total. Observers say the bigger concern for the industry still continues to be the inflation in gas and energy prices. www.money.cnn.com