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Casual dining menu prices rise modestly

Despite increased commodity costs, and early predictions of price hikes, average menu prices increased modestly

Average menu prices in the casual-dining restaurant segment rose only slightly this year despite increased commodity costs and early predictions from restaurant operators that price increases would be necessary to cover escalating expenses and slowed sales.

The casual-dining segment’s menu prices increased 1.2 percent this year over last, according to Leslie Kerr, founder of Intellaprice LLC in Boston, which surveys 176 casual-dining restaurants across the nation and maintains a database of 32,000 menu prices. This year’s increase in pricing compares with a 1.4-percent menu price decline in 2010.

“Interestingly, the price increases are very modest, and down from increases in previous years,” Kerr said. “Operators began 2011 declaring that they would take price increases to cover the commodity and fuel cost increases, yet the reality based on data from the fall shows that they have been conservative with menu decisions.”

Intellaprice found average casual-dining lunch menu prices in 2011 fell 94 cents, or 10 percent, to $13.68, canceling out a lunch-price increase of 93 cents in 2010. Average casual-dining dinner entrée prices rose 41 cents, or 3 percent, to $14.09, in 2011, following a 72-cent increase in 2010.

“Operators are looking to positively reinforce dining-out patterns without alienating guests,” Kerr said, “and they seem to have backed off from their early rallying cries of taking price.”

Where casual-dining operators did take sizable price increases was in desserts, up 7 percent, and side items, up 12 percent.

The average dessert prices this year rose to $5.42 compared with $5.04 last year. Intellaprice’s database totaled 670 items in 2011, and 708 in 2010.

“The minimum and maximum dessert prices are down this year,” Kerr said. “It’s just what’s in between — how the menu has been engineered — that makes up the difference.”

The most common dessert price in both years was $5.99, she said, but items in the $6 to $7 range are becoming more prevalent.

“Mini-desserts, which have become increasingly popular, are being offered in multiples of 6 for $12,” she said. “While operators also offer $1 desserts such as brownie bites with lunch at Applebee’s, they are increasing the mix of other items and prices between those extremes.”

Intellaprice also looked at other casual-dining menu categories:

Lunch: Data indicates operators are shying away from lunch items that exceed $10. In 2010, there were 19 price points above $9.99 in lunch offerings that ranged from $10 to $27.99, Kerr said. In 2011, however, there were just 11 price points, with the highest offering priced at $14.90.

“Operators are taking note that guests are not interested in expensive lunches in the casual-dining segment, and that’s something that continues,” Kerr said.

Add-ons: Seafood items, which build check, contributed to a higher average category price for add-ons. “We commonly think of add-ons as low-end, everyday items such as adding cheese or guacamole for 49 cents,” Kerr said. “But for operators, incorporating items like lobster tail or shrimp scampi, go a long way toward building check and profit.”

Dinner: The most frequently used price points at dinner shifted from $8.99 in 2010, to $9.99 in 2011, Intellaprice found. The second most common price point in 2011 was $10.99, up a dollar from a year earlier.

Contact Ron Ruggless at [email protected].
Follow him on Twitter: @RonRuggless

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