'Appetizer economy': Food inflation is on restaurant table as diners go smaller with menu choices

Core Insights - The current dining trend in the U.S. is characterized by an increase in appetizer orders, reflecting a shift in consumer behavior towards more affordable dining options amid food inflation [1][2][3] Restaurant Industry Trends - Appetizer orders have risen by 20% year over year, while orders for entrees and desserts remain flat or declining [2] - The "appetizer economy" is emerging, with some appetizers experiencing growth rates exceeding 30% [3] - Dessert orders have decreased by 2% year over year, indicating a shift in consumer preferences [3] Consumer Behavior - Consumers are increasingly opting for appetizers due to their association with promotions and drink specials, making dining out more affordable [4] - The trend towards frozen or shelf-stable appetizers is also growing, helping restaurant operators manage costs and reduce waste [4] Grocery and Private Label Trends - The food spending landscape reflects a K-shaped economy, with affluent consumers increasing spending on novel products while the majority shift towards private label brands [5][6] - Consumers can save 10-20% by switching to private label products, which have gained acceptance and are now perceived similarly to national brands [6] - Retailers like Albertsons, Costco, and Kroger are expanding their private label offerings, with expectations that private label could represent 30% of sales for some companies [7] Food Inflation and Pricing - Food inflation remains persistent, with food-at-home prices increasing between 1.9% to 2.7% year-over-year [9] - The consumer price index for September indicated a 3.1% increase in food prices, with specific categories like meat and poultry seeing a surge of 5.2% [10] - The "food away from home" sector is experiencing even higher inflation at 3.7%, prompting a shift towards private label spending in various dining establishments [11] Supply Chain Challenges - Tariffs and supply chain issues have contributed to price increases, particularly for perishable items, with no immediate relief expected [12] - The complexity of the food supply chain means that consumers may not understand the time required to stabilize supply after disruptions [13]