SACRAMENTO – Food prices at California limited-service restaurants have dramatically risen by 13.1 percent since September 2023, when legislation increasing the state’s minimum wage for fast food workers to $20/hour was signed. California vastly outpaces menu price increases in the rest of the nation.
Datassential, a global food and beverage intelligence company, released data comparing menu pricing for limited-service restaurants (which includes both fast-food and fast-casual brands impacted by AB1228) from September 2023 – October 2024 in all 50 states.
The data shows that while menu price inflation has slowed at limited-service restaurants nationwide since April 2024, it has accelerated in California – resulting in a nearly six percent menu price inflation gap at limited-service restaurants over the past year.
Save Local Restaurants attributes the six percent higher food costs to the impact of the $20/hour minimum wage, which is unique to California. Widespread news coverage points to higher prices, job loss, workers’ hours being cut and restaurant closures as family-owned local restaurants struggle to cope with April’s 25 percent overnight wage increase.
In a previous report following the passage of the $20/hour minimum wage, Datassential found that food prices at limited-service restaurants in California “have risen notably at a pace faster and more significant than anywhere else in the country since the announcement.”
Findings from Datassential’s research include:
- The gap in menu price inflation between California and All Other States is much smaller at full-service restaurants (which are not subject to AB 1228)
- Food prices at California’s limited-service restaurants have risen by 13.1% since September 2023
- California has experienced far higher menu price inflation than any state since the $20/hour minimum wage for fast food workers was announced in September 2023. Moreover, California had a particularly large inflation spike in April 2024 when AB 1228 took effect
- In April 2024, a whopping 34.6% of menu items at limited-service restaurants in California saw a price increase – about 5 times the rate experienced by all other states
- California’s menu price inflation at limited-service restaurants far outpaces the rest of the nation, leading to a nearly 6% inflation gap at limited-service restaurants over the past year. (13.1% in CA vs. 7.2% in All Other States)