FoodMaven’s Post

Restaurants across the country are closing; "nearly all full-service restaurant owners — 92 percent — consider rising food costs a significant challenge. Increased labor costs are not far behind at 90 percent, and 67 percent percent say utilities present a significant challenge. But they’re also spending more on the same things you’re spending more on — dishwasher detergent, hand soap, paper products, linens, laundry services, plates, silverware, and on and on." In other words, persistent inflation for three years. Change is coming. https://lnkd.in/grmNY5a9

California’s $20 fast-food wage has indeed hurt traffic. Fast-food restaurants in the state have raised their prices at twice the national average. California fast-food restaurants have increased prices 6.5% this year, compared with 3.3% at all states. Consumers there are eating out less often and ordering less when they do. Traffic in California at fast-food restaurants is down 3.8% this year compared with a 1.8% decline in all states. What are your thoughts on higher wages vs. higher prices and less traffic? Read the full article here: https://lnkd.in/ePjxc4rh #FastFoodIndustry #WageIncreases #RestaurantPricing #CustomerTraffic #EconomicImpact #CaliforniaRestaurants #FastFoodTrends #ConsumerBehavior #RestaurantChallenges #RestaurantFinance #HospitalityIndustryInsights #PriceVsTraffic #RestaurantEconomics #FoodserviceBusiness #DiningTrends

You know that shocked look on someone's face when the dinner check comes... "As diners complain of expensive bills and stick with the familiar, restaurateurs feel their own squeeze. Margins are tighter than ever as restaurants try to balance higher costs of rent and ingredients, reservation site fees and insurance premiums, and paying fair wages, all while trying to keep prices at a level customers will actually pay. By many accounts consumer inflation is down, and sure, the GDP is up, but something isn’t working on either side of the restaurant equation. This isn’t a problem of one city or class or demographic. Things are feeling more expensive everywhere. That the price of food feels high is an issue acknowledged at even the top level of politics. We spoke to restaurants around the country about what their books are looking like: what costs more, who’s coming in, and how they’re making it work — or whether it’s working at all." #restaurants #diningout #inflation #spending #costs #rent

Blip or leading indicator? | "Thirteen of the 21 casual-dining chains that are part of publicly traded companies reported same-store sales of 1% or less and 11 of them reported absolute declines. That includes notable stalwarts like Olive Garden, which admitted that it was losing lower-income consumers." #consumerspending #restaurants #restaurantindustry #foodservice #economy #economictrends #spending

Is your restaurant dealing with rising wages? Inflation? Maybe even lower revenue because of Ozempic? (Believe it or not, it's a problem coming down the pipeline!) We cover some of the biggest challenges in the restaurant industry in our latest article.

Restaurants need to evolve to survive. But you're gonna hate what they've got in mind. From "dynamic pricing" to switching to counter-serve to adding a "credit-card surcharge," staff turnover and rising food prices have restaurants reeling to stay in business. Check out this Business Insider article to see how you may be affected:

As restaurants embrace dynamic pricing like hotels and airlines have done for some time, it may pose challenges in consumer acceptance amid rising costs. Yale School of Management Professor Nathan Novemsky shared his thoughts:   "Consumers would find it unfair to pay more simply because the restaurant knows consumers want to eat at a certain time – that would be like raising the price of shovels in a snowstorm, a very unwelcome tactic. Consumers find it more fair if costs at the restaurant go up when prices go up – e.g. we have to hire more people to deal with the busy time so it costs more to serve customers. In other words, consumer acceptance of dynamic pricing in restaurants may depend critically on why consumers think the prices are changing. The other main feature that may drive reactions is the reference point – i.e. are consumers paying more than regular price or less than regular price. As mentioned in the article, using dynamic pricing to give discounts is welcome and fair. Using dynamic pricing to raise prices is potentially troubling. That makes it important to emphasize at all times that the prices shown are at or below the 'regular' price. Of course raising the regular price, e.g. because food costs are rising, might be a key part of this strategy." https://lnkd.in/gxTbAwDP

Apparently, Supply & Demand still functions in markets. California artificially raised the price of wages at QSR restaurants by 25% and now sales are off at those restaurants, workers are being let go and having their hours reduced. Government shouldn't interfere with free markets because politicians don't think dynamically - they rarely consider the unintended consequences of their actions. From The Food Institute - California fast-food restaurants are charging higher prices and seeing fewer customers. New data from Revenue Management Solutions shows that price increases at fast-food restaurants are increasing at more than twice the national average – and traffic reflects it, reported Restaurant Business. https://lnkd.in/g2FKMfv7

Dealing with high food cost? Click through to learn 3 takeaways from Erik Herrmann at Capital Spring. "There's a whole toolbox of strategies to tackle the immediate effects of inflation, but the real game-changer comes from setting sights on the long haul." #restaurant #foodcost #inflation #education