Restaurants are struggling more than ever. Inflation, shrinking consumer purchasing power, rising ingredient prices, and relentless media pressure have created a hostile environment for the entire food industry. Combined with the lingering effects of lockdowns and a “forced cooking course” at home, this combination can be a fatal blow—especially for restaurant owners who are not prepared to adapt.

By the end of 2022, inflation reached levels unseen for decades. Food and oil prices surged due to the ongoing war between Russia and Ukraine, pushing inflation into double digits in nearly half of the world. High inflation rates were recorded in highly developed countries across Western Europe (10.4% in Germany, 10.9% in Sweden, and 11.1% in the UK) as well as in developing economies (18.8% in Kazakhstan, 12.8% in Peru, and 13% in Senegal).

These numbers reflect more than economics—they translate into real changes in daily habits for millions of people. People still need to work, commute, shop, and survive until the next morning, regardless of global instability. But when inflation strikes, consumers change their behavior quickly, often cutting back on discretionary spending.

In developed countries, where high inflation levels were almost unheard of for decades, the situation became a game changer. As people returned to offices after the pandemic, an unexpected trend began to spread: lunchflation.

What is lunchflation

What is lunchflation? The term refers to the sharp increase in the cost of office lunches—whether it’s a delivered meal, a wrap, a burger, or a quick salad—until it becomes an economic burden. In extreme cases, the price rises so much that employees simply stop buying lunch outside altogether.

In other words, the lunchflation meaning is simple: everyday meals eaten outside the home are becoming unaffordable for many consumers, especially during a broader cost of living crisis.

According to CNN, out-of-home food prices increased by 7.2% over the last year. Overall food prices rose by 9.4%, while grocery store prices climbed by 10.8%. Inflation touches nearly every part of eating out—from a morning coffee and donut to a lunchtime sandwich.

Lunchflation is real. It affects the budgets of thousands of employees worldwide. However, it’s not a one-sided issue: inflation isn’t simply increasing restaurant profit margins.

Food Cost Inflation: Why Restaurants Raise Prices

Rising prices don’t appear out of nowhere. Restaurant owners face dramatic increases in nearly every cost category, including utilities, maintenance, staff wages, and ingredients. According to the U.S. Energy Information Administration, 2022 became the first year since 2013 where gas prices stayed above $3 per gallon.

Energy costs and ingredient inflation are affecting everyone. Grocery prices and out-of-home meals are rising simultaneously. Data from Supermarket News shows that restaurant food remains approximately 3.4 times more expensive than meals prepared at home. With consumers more sensitive than ever, price sensitivity becomes one of the key drivers shaping restaurant demand.

Another major factor: remote work.

With 20% of the U.S. workforce working from home, more money is being spent on home meals. Approximately 62.5% of food spending goes toward food consumed at home, while only 37.5% is spent on out-of-home meals. This is bad news for restaurants, as fewer people need lunch near office locations.

Still, restaurants are not defenseless. Smart strategies and operational optimization can help businesses survive and even stand out.

What Restaurants Can Do to Tackle Lunchflation

Lunchflation is a mutually reinforcing cycle: rising costs lead to higher menu prices, and higher prices reduce consumers’ motivation to dine out. This often results in fewer customers, lower sales volume, and increased pressure on margins.

The best solution is clear: reduce costs wherever possible and increase efficiency—without blindly raising prices.

Here are the most effective approaches.

1) Automation: Cut Back-Office Costs

Restaurants may seem difficult to automate, but the greatest savings often come from the back office rather than the kitchen. Many repetitive processes can be streamlined through SaaS tools and integrations, including:

• Human resources and payroll operations

• Accounting

• Analytics and business intelligence

• Order processing and queuing

Using APIs, these tools can share data with minimal human involvement. For example, employee working hours can flow into payroll, then into accounting, and finally into BI reporting to improve cost control.

According to Kissflow, up to 48% of businesses already use automation solutions, and 50% plan to automate even more repetitive tasks.

2) Online Ordering: Increase Average Transaction Value

Providing online ordering through your own channels can reduce customer service time, lower staffing pressure, and improve speed. It also boosts revenue by increasing average transaction value through upselling features and better menu presentation.

Online ordering is no longer optional. The market is expected to reach $220 billion by 2023, accounting for 40% of restaurant sales. Additionally, 64% of customers prefer digital ordering over traditional ordering in quick-service restaurants.

This is both a cost-saving tool and a growth engine.

3) Menu Engineering and Value Meals

One of the most powerful tools for managing inflation is menu engineering. Restaurants should analyze which items produce the best margins and which drive traffic, then optimize pricing and placement accordingly.

Instead of raising prices across the board, restaurants can design value meals that feel affordable while still protecting margins. Bundles can help customers feel they are receiving value, even when inflation increases the base cost of ingredients.

Menu engineering also helps adjust to shifts in consumer behavior and higher price sensitivity.

4) Use Big Data to Find Savings

With modern tools, restaurants can collect and analyze data more effectively than ever. In the hands of a skilled analyst—or a smart system—business data becomes a roadmap to higher resilience and cost efficiency.

Platforms like Ordering Stack can collect customer and operational data points and organize them into actionable dashboards. This supports inventory planning, staffing decisions, marketing optimization, and profitability improvements.

5) Improve Customer Retention with Digital Loyalty Offers

In times of rising prices, the real battle isn’t just customer acquisition—it’s customer retention.

Restaurants can use digital loyalty offers to keep customers coming back without relying solely on discounts. Loyalty programs, points, personalized offers, and app-based promotions can increase repeat orders while protecting margins.

Loyalty programs also help increase average transaction value by encouraging add-ons and return visits.

6) Look for Alternatives Without Reducing Quality

Cost savings don’t always mean lowering quality. Restaurants can reduce expenses by:

• choosing suppliers who offer bigger bundles

• sourcing locally to reduce transportation costs

• optimizing energy usage

• switching to LED lighting and installing tap aerators

• investing in energy-efficient kitchen equipment

According to EU data, reducing heating temperature by 1 degree can save up to 7% of energy. Raising AC temperature by 1 degree can save up to 10%.

Small operational changes can generate surprisingly large savings—especially during food cost inflation.

Conclusion

Lunchflation is not just another buzzword—it is a major threat to the traditional HoReCa business model. With food cost inflation, higher consumer price sensitivity, remote work trends, and the global cost of living crisis, lunch habits are changing permanently.

However, restaurants that adopt automation, optimize pricing using menu engineering, offer value meals, leverage digital ordering, and build customer retention through digital loyalty offers can survive and stand out.

In the end, every restaurant faces lunchflation—but managing it better than competitors is what separates the winners from the businesses that disappear.