Inflation isn’t out the window in 2025.
Restaurant execs are still wrestling with food prices as inflation starts to moderate.
“Most of the commodities are pretty okay, except beef,” Portillo’s (PTLO) CEO Michael Osanloo told Yahoo Finance at the ICR conference in Orlando. He called beef the “scariest thing” for its supply chain, making up 30% to 35% of its commodity buys.
Its team forward buys beef at a certain price to save on costs and has a freezer program. CFO Michelle Hook is expecting “relatively stable overall costs” in 2025 after the team guided to commodity inflation of mid-single digits for fiscal 2024.
According to the latest CPI data from the Bureau of Labor Statistics, beef and veal prices jumped 4.9% in December from a year ago but declined 0.2% month over month, with cattle production remaining low.
Per the USDA, 2025 beef production is expected to come in at 25.6 billion pounds, down 615 million pounds from its November outlook.
Shake Shack (SHAK) CEO Rob Lynch said the company projects low-single-digit inflation for its supply chain, with relatively stable beef prices “despite some of the projections heading into this year.”
The burger chain is not as dependent on chicken as some of its fast-casual peers, per Lynch, but beef makes up a third of its costs.
The return of the bird flu is throwing a wrench in egg and poultry prices. Nationally, a dozen large Grade A eggs cost $4.15 in December, compared to $3.65 in November and $2.52 at the start of 2024. It’s slowly approaching its record high of $4.82 reached in January 2023.
Egg prices are up 36.8% year over year and 8.4% month over month, while chicken prices are up 1.2% year over year and 0.3% from the prior month. According to the USDA, US egg production is down 4% year over year, with 3% fewer egg-laying hens.
Denny’s (DENN), which also owns Keke’s Breakfast Cafe, sells “a lot” of egg items, CEO Kelli Valade told Yahoo Finance.
“Reasonable egg prices are of concern to many,” she said. The company tries to keep a lid on costs by locking in prices for 70% of its basket ahead of time.
Texas A&M professor David Anderson said the bird flu will affect turkey and egg farms but less so “broiler growers,” who raise chicken for meat. Potbelly (PBPB) CEO Bob Wright noted that the previous round of bird flu caused a spike in turkey costs.
In December, prices for other uncooked poultry (including turkey) were down 0.1% year over year.
Anderson added that “wholesale chicken cut prices have been higher than the same time last year,” not necessarily because of the bird flu but because of an increase in demand as consumers substitute pricey beef with chicken.
Overall, food prices jumped 2.5% from a year ago and 0.2% from November to December.
Dutch Bros (BROS) CEO Christine Barone told Yahoo Finance her team is watching for inflation on dairy, sugar, and coffee prices, while Cracker Barrel (CBRL) CEO Julie Masino said chicken, dairy, eggs, coffee, and oil are key ingredients it’s watching.
In Cracker Barrel’s 2025 fiscal first quarter results, the company shared its outlook that commodity inflation would increase by 2% to 3% compared to last fiscal year.
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Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at [email protected].
