In this Weekly Wrap, we’re looking at food price inflation, luxury retail’s F&B strategy, and more.
Dining Inflation Increases for 2026
What You Need to Know: “Food Price Outlook - Summary Findings”
The Source: USDA
What You Need to Know:
Food prices rose faster than overall inflation. The CPI for all food increased 0.4 percent from July 2025 to August 2025. Food prices in August 2025 were 3.2 percent higher than in August 2024.
The level of food price inflation varies depending on whether the food was purchased for consumption at home or away from home:
- The food-at-home (grocery store or supermarket food purchases) CPI increased 0.4 percent from July 2025 to August 2025 and was 2.7 percent higher than in August 2024.
- The food-away-from-home (restaurant and other foodservice purchases) CPI increased 0.3 percent from July 2025 to August 2025 and was 3.9 percent higher than in August 2024.
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In 2026, prices for all food are predicted to increase 2.7 percent, with a prediction interval of -1.8 to 7.5 percent. Food-at-home prices are predicted to increase 2.3 percent, with a prediction interval of -4.3 to 9.6 percent, and food-away-from-home prices are predicted to increase 3.3 percent, with a prediction interval of 0.7 to 5.8 percent.
Our Take:
We all know that prices are on the rise, it’s talked about at every corner. What is interesting is the difference between increases of food-at-home versus food-away-from-home. While the difference in projected increase in food-at-home versus food-away-from-home is only 1 percent, it’s still higher. And if you throw in the current year’s difference at 1.2 percent higher, it starts to become significant.
What does it mean? It means there needs to be a continued focus on value proposition, inventory controls, and marketing. Consumers are already cutting back on dining-away-from-home, we need to be more diligent with whom we are marketing to and what we are marketing to them.
Prices on the Rise
The Headline: “Coffee, burgers, and burritos are getting pricier as restaurants pass rising costs on to diners”
The Source: Business Insider
What You Need to Know:
If you think your burger, burrito, or cold brew already costs too much, brace yourself — restaurant groups say they would have to raise prices by 30% just to stay profitable amid rising costs.
In a new survey from the restaurant management software company Toast, nearly half of restaurant operators said they plan to increase menu prices if inflation, tariffs, and labor costs continue to climb.
The National Restaurant Association estimates that to maintain a modest 5% profit margin, the average restaurant would need to raise prices by 30.3% — a move many owners fear would scar
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For the restaurant industry, which already operates on thin margins, the higher cost of ingredients is not just an inconvenience — it's approaching a crisis point. Not only are their own food and labor costs higher, but consumers are also pulling back on spending, dining out less, and seeking promotional deals when they do.
Our Take:
If the last article is what is happening, this article is why it is happening.
What is different though is the stark contrast of the numbers. One article expects a 3.5 percent increase overall in dining out while the other says some operators will need to raise prices 30 percent. That is not a significant increase, it’s a massive increase.
Why the disparity?
Simply put, the USDA report takes into account all away-from-home prices, Quick Service, Fast Casual, Casual Dining, all of it. Major multi-unit operators have more leverage, while massive corporations have the ability to eat some of the profits and access to capital that a single unit or small multi-unit operator may not have. This puts them at a major advantage.
For most businesses a 30 percent increase would amount to restaurant suicide. At a time when consumers are looking for value, the increase is simply not feasible, but neither is going out of business. Reengineer the menu, make it profitable with quality, focus on the items that work, adjust items that you can, shrink portion sizes if it makes sense. Olive Garden is seeing success with the tactic of offering multiple portion sizes. If it works for a big corporation, it can work for a mom and pop. The idea is to keep the traffic flowing to your establishment. Volume can make up for cost pressures that affect the bottom line. Keeping people coming in, and making the menu a little more appealing is step one.
People-First Brands
The Headline: “Culture as currency: How three restaurant leaders built people-first brands”
The Source: Nation’s Restaurant News
What You Need to Know:
Labor is always a challenge for restaurateurs, but the past few years have been especially hard. The pandemic turned restaurant employees into essential workers, and that was followed by the “Great Resignation” of 2022 when the labor force quietly rebelled and didn’t want to go back to hourly jobs.
The historic labor shortage led many operators to focus even more on their staff, and reinforced the importance of company culture.
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“We’re actually not in the coffee business; we’re in the relationship business and our product is love,” he said. The chain only hires for one position, what the company calls “broistas” — a play on baristas — whose job requires them to learn how to make sometimes complex and detailed drinks, but at the heart of their job is making their customers happy, and all the panelists agreed that customers can only be as happy as their employees.
Sturm said Firebirds is really a relationship business. “We just happen to serve really good food and cocktails.”
Mostafavi said that when he founded South Block in 2011, the ideas of culture and mission weren’t on his radar.
“I was just trying to pay the bills,” he said. But after the concept grew from three locations to seven in a year, he realized he “wasn’t really happy with the culture of the company.”
He said that’s a good size to assess a company’s culture, as processes and training start to get systematized.
He started hiring not based on prospective employees’ experience, but on their passion and purpose, and buy-in to South Block’s mission, “which is to make people feel awesome one block at a time.”
He said that most people want a sense of purpose more than a job.
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“It can’t just be catchphrases. That’s not culture. Culture is what you model, live, eat, breathe every single day,” he said.
And it evolves: Corporate culture changes over time, and it’s important to see that culture through the lenses of managers and hourly employees.
“We’re constantly looking into it,” he said, adding that, based on feedback from managers, Firebirds is working on expanding personal time off for hourly employees — doubling it, in fact, based on feedback from managers.
Our Take:
Everything in here should seem pretty straightforward and commonplace, right? But it isn’t and I understand why.
It’s very easy to talk about culture and putting your employees first, but putting those words into action is so much harder. We should all take note not only of what the operators in this article are talking about but also figure out how they did it.
Being an owner is stressful. I can’t tell you how many operators I speak to who tell me there are always a few months they don’t pay themselves. They live in their spaces. I’ve been there, I get it, I’ve done it.
Unfortunately, when people are stressed and money is tight, most tend to make short term fight-or-flight decisions as opposed to a long haul choice. Most of us want to do what the operators in the article do. In order to achieve that, it requires sacrifice, patience, and diligence. Most won’t take the steps, others will force themselves to, and those that do will thrive.
Luxury Retail and F&B
The Headline: “Coffee and ‘chili crab’ ice cream: How luxury fashion brands like Coach are capturing Asian consumers”
The Source: CNBC
What You Need to Know:
A corduroy Ralph Lauren letter jacket at the brand’s store in Singapore retails for around $900 Singapore dollars ($693).
But a vanilla latte in its cafe? A comparative steal at SG$9.
From Ralph Lauren to Coach, Louis Vuitton, Dior and Prada, clothing and luxury brands are opening stores in Asia to connect with consumers who are increasingly prioritizing experiences over tangible purchases.
This is especially true of Gen Zs, Coach CEO Todd Kahn told “Squawk Box Asia” Monday.
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Ultimately, company data showed coffee shops are “probably the best format for us,” he said.
Coach cafes in areas of high foot traffic are profitable on their own, he said. Moreover, they sell more merchandise, often because shoppers’ companions have a place to rest and relax, allowing shoppers more time to linger, he said.
“Where we have a coffee shop, we’ve seen somewhere between 15% and up to 35% better results in the core shop,” he said.
Our Take:
I know this article is about luxury shopping in Asia, but this trend is not new and it actually translates just as well, if not better, in the U.S. and in places other than the luxury market, though I can see it thriving in the U.S. in that capacity as well.
Think about it. Coffee shops are in most supermarkets these days, it’s a captive audience. In Illinois bars are also in supermarkets. Printemps in NYC is a luxury retailer with luxury food and beverage offerings. Banks are now partnering with coffee chains to bring cafes to their branches.
I think we will continue to see the uptick in luxury brands with F&B outlets, but what would be interesting is for mid-tier brands to get in the game. Would it work? I don’t know, but it would be interesting to see the effects of a coffee shop or even a bar inside a Zara. It could be a way to drive up revenue both in retail sales but also F&B.