Expect higher menu prices as Illinois reopens: analysts

The expected jump in menu prices comes down to simple economics: a labor shortage in the restaurant industry, higher wholesale prices on food, and – now that the economy is reopening – increased demand.

The Illinois Restaurant Association says to expect the largest menu price jump since 2008.  

"Food prices are going up, labor costs are going up…They rose sharply in April for the fourth consecutive month. We saw beef, pork, dairy up, labor costs up," said IRA President Sam Toia.

Those increased labor costs are the result of fierce competition for workers.  

"Right now, labor is in short supply," said FOX Business Analyst Phil Flynn. "People aren't working like they were before. They don't want to go back to work. They're getting extended unemployment checks."

This past year during the pandemic, menu prices are up almost 4 percent. 

Don't expect that to slow down once the economy fully reopens. 

"Let's face it: the demand right now for restaurants is the highest it's been in a long time," said Flynn.

Fortunately, the people we talked to tonight in Evanston seem more than willing to dig a little deeper to enjoy a night out. 

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"Especially if it's employing people or if it's helping a restaurant, a lot of these people were shut down," said David Kwo.

"I'd be willing to pay a little bit of a premium to have that type of an experience," said John Snyder.

"We also are willing to spend a little bit more to get out of the house and do more things," added Jamie Silverberg.

Chipotle announced it's increasing its prices about four percent to help pay for increased wages for its employees up to a minimum of $15 per hour.

Analysts say do not be surprised if other major restaurant chains follow suit.