Food Prices Soar, and So Do Companies’ Profits

“We have to have healthy margins to be able to build out that innovation and get it to our customers in the market,” Mr. Connolly said on the call. Conagra did not respond to a request for comment for this article.

Likewise, investors and analysts are closely watching the continued price hikes at Chipotle, wondering when it will become too much for its customers. In late October, the company said its profit margin widened in the third quarter, since it was able to increase the prices it charges faster than its own costs rose. The company said its prices in the final three months of the year would be nearly 15 percent higher than they were a year earlier.

“The average entree was around $8 nationally two years ago, and they’ve maybe taken $1.50 in price in the past two years,” said Sharon Zackfia, group head of consumer research at William Blair & Company.

She added: “I am intrigued by what happens when commodities fall again, and how do restaurants offer more value to the consumer without lowering prices? In the long arc of history, most restaurants do not lower prices.”

Still, some cracks are emerging. Not all companies have increased profits. Profit at McDonald’s, for example, fell because of how the strong U.S. dollar has weakened other global currencies. High prices for deli meat, fresh fish and frozen dinners have led some shoppers to stop buying those products, according to data from Information Resources Inc., a research firm.

Executives at Darden Restaurants said in September on a call with analysts that households with less than $50,000 in annual income were feeling the overall effects of inflation and eating less frequently at its Olive Garden and Cheddar’s restaurant chains. Rick Cardenas, the chief executive of Darden, said, “We are seeing softness with these consumers while conversely, we are seeing strength with guests in higher income households.”

Nicole Blaha, 53, who lives in Scottsdale, Ariz., started going to Walmart more frequently to stock up on things like granola bars and cereals to save money. She also uses an app called Ibotta to receive cash back on some of her purchases. It is one area of her life that has been affected by inflation where she feels like she can make substantiative changes.