Dennys (NASDAQ: $DENN) and other restaurant chains have begun placing a surcharge on %Eggs as a growing shortage of the staple food item drives prices to record highs.
South Carolina-based Denny’s, which operates more than 1,500 restaurants globally, said the surcharge will vary depending on an outlet’s location.
However, Denny’s said in a statement that it has no choice but to invoke a surcharge on eggs as an outbreak of bird flu constrains the available supply and ratchets up costs.
Bird flu has resulted in the deaths of millions of egg-laying hens in the U.S., which has led to a shortage of eggs on grocery store shelves and for restaurants across America.
With supplies depleted, wholesale egg prices have hit record highs in recent weeks.
According to the U.S. Department of Agriculture, wholesale prices for white eggs rose to $8.07 U.S. per dozen in the past week, an increase of 4.7%.
At the same time, inventories of white eggs declined 2% overall and were down 12.5% for nutritionally enhanced eggs.
Denny’s is not the only restaurant chain to pass on the price increase to its customers. Waffle House has applied a surcharge of $0.50 U.S. per egg to its menu.
Grocery store chains including %Walmart (NYSE: $WMT) have placed limits on the number of eggs that can be purchased by consumers at one time.
The situation with bird flu in the U.S. is expected to get worse before it gets better.
America’s flock of egg-laying hens fell to its lowest level since 2016 in January as avian influenza, aka bird flu, caused the deaths of millions of birds.
The number of hens declined to 363 million in January, down 3.8% from a year ago, according to the U.S. Department of Agriculture.
Egg production of 8.87 billion was down 4.2% and at its lowest level since 2016.
And more bird flu cases are coming, with a commercial egg operation in Ohio reporting more than three million birds were infected with the disease in the past week.
