Dan Murphy
We are family.
- Joined
- Apr 20, 2000
$3.69 for a small, Linda, the size of the original 20 cents one there. With tax, $4.11 vs 21 cents.
Whatever happened to cheap fast food items?
- Thread starter bcla
- Start date
i have to say, when all is said and done what i thought was rather insane cost for our pizza night actualy ended up being a pretty good value for our household-
we spent just shy of $95 at mod pizza and got-
6 pizzas
1 cheesy bread
1 family size salad
2 no-name desserts.
we ended up netting 14 individual meals. when i compare that to what we would spend on a single trip to wendy's, for the 3 adults in our household, the food might result in a small leftover meal for one of us the next day and the cost per meal would be MUCH higher.
we spent just shy of $95 at mod pizza and got-
6 pizzas
1 cheesy bread
1 family size salad
2 no-name desserts.
we ended up netting 14 individual meals. when i compare that to what we would spend on a single trip to wendy's, for the 3 adults in our household, the food might result in a small leftover meal for one of us the next day and the cost per meal would be MUCH higher.
The cheapest item on our McDonald's $1 $2 $3 list is more than $2. Dollar menus are mainly a thing of the past. We use the apps now to buy fast food since they often have good discounts. In fact we have over 15000 points in McDonalds because it is better to use the 25% off our order vs getting an item for free. At some point as they get people hooked on using the apps, they will drop those discounts.
Planogirl
I feel the nerd in me stirring
- Joined
- Aug 11, 2000
Exactly Dan. I don’t get it.$3.69 for a small, Linda, the size of the original 20 cents one there. With tax, $4.11 vs 21 cents.
Cannot_Wait_4Disney
The Colombo of Cippolini.
- Joined
- May 18, 2005
Taco Bell is bringing back their cheap menu.
They even have a $1 rebate if you can keep it down long enough to leave the establishment.
They even have a $1 rebate if you can keep it down long enough to leave the establishment.
I haven't eaten fast food for about half a year, but after your post I noticed that this food has really become more expensive. Therefore, I do not plan to return to unhealthy food. I found https://betterme.world/articles/how-to-lose-50-lb-in-2-months/ and I want to start losing weight before summer. I hope I can lose weight and look perfect
Last edited:
wabbott
DIS Veteran
- Joined
- Aug 4, 2021
https://www.spritzlerreport.com/post/it-s-been-30-years-since-food-ate-up-this-much-of-your-income
It’s Been 30 Years Since Food Ate Up This Much of Your Income
Ongoing high costs lead food manufacturers and restaurants to keep prices elevated
By Jesse Newman and Heather Haddon, WSJ
Feb. 21, 2024 - 5:30 am EST
The last time Americans spent this much of their money on food, George H.W. Bush was in office, “Terminator 2: Judgment Day” was in theaters and C+C Music Factory was rocking the Billboard charts.
Eating continues to cost more, even as overall inflation has eased from the blistering pace consumers endured throughout much of 2022 and 2023. Prices at restaurants and other eateries were up 5.1% last month compared with January 2023, while grocery costs increased 1.2% during the same period, Labor Department data show.
Relief isn’t likely to arrive soon. Restaurant and food company executives said they are still grappling with rising labor costs and some ingredients, such as cocoa, that are only getting more expensive. Consumers, they said, will find ways to cope.
“If you look historically after periods of inflation, there’s really no period you could point to where [food] prices go back down,” said Steve Cahillane, chief executive of snack giant Kellanova, in an interview. “They tend to be sticky.”
Companies are set to pay more for staffing, after 22 states in January lifted the minimum wage for hourly workers.
In 1991, U.S. consumers spent 11.4% of their disposable personal income on food, according to data from the U.S. Agriculture Department. At the time, households were still dealing with steep food-price increases following an inflationary period during the 1970s.
More than three decades later, food spending has reattained that level, USDA data shows. In 2022, consumers spent 11.3% of their disposable income on food, according to the most recent USDA data available.
Food inflation has raised the ire of President Biden, who took to Instagram during the Super Bowl to blast food makers that he said were providing less bang for consumers’ buck—putting fewer chips in each bag or shrinking the size of ice-cream containers.
“The American public is tired of being played for suckers,” Biden said. “I’ve had enough of what they call shrinkflation. It’s a rip-off.”
David Chavern, CEO of the Consumer Brands Association, which represents major food manufacturers, said the industry offers many choices at different price points. “We hope to work with the president on real solutions that benefit consumers,” he said.
In suburban Chicago, Lisa Wister said her food bills are rising faster than her family’s income, leading them to make their own granola from scratch and pack their own snacks for the movies. “Everything is a negotiation, an analysis about our budget,” said Wister, an occupational therapist. “It’s exhausting.”
Many diners have said they are going out less frequently or skipping appetizers, while buying cheaper store brands more frequently at supermarkets and seeking out promotions or deals offered via apps. That is starting to chip away at some sales for food makers and restaurant operators.
Denny’s, Wendy’s and other restaurant chains told investors this month that their guest counts fell last year compared with 2022 levels as consumers, in particular those with lower incomes, feel the financial pinch. Big food makers including Hershey and Kraft Heinz have reported that their sales volumes declined as prices rose for their products, with several reporting a hit to profits in the latest fiscal year—and others an increase.
Food companies said they are feeling pinched themselves. While commodities such as corn, wheat, coffee beans and chicken have gotten cheaper, prices for sugar, beef and french fries are still high or rising.
Oreo maker Mondelez said in January it would continue raising prices on some of its products this year, largely because of cocoa prices, which earlier in February surged past a 46-year record. Hershey said this month it expects more expensive cocoa to cut into the company’s profit this year. Kraft Heinz said inflation is moderating but that its costs are still higher, driven in part by pricier tomatoes and sugar.
Companies are set to pay more for staffing, after 22 states in January lifted the minimum wage for hourly workers. Hiring skilled workers like mechanics to replace employees who retired during the pandemic is particularly expensive, said Henk Hartong, CEO of Brynwood Partners, which owns 17 food and beverage plants that make Pillsbury cake mixes and other products.
Restaurant chains said they are trying to operate more efficiently to help defray wage increases, but they also expect to raise prices.
“It’s a really fast move and a high percent increase,” Chipotle Mexican Grill CEO Brian Niccol said in an interview, referring to California’s 25% minimum wage increase for fast-food workers employed by large chains, set to take effect in April. “Pricing is going to be part of the puzzle.”
When Anna Zabinski and her husband eat out these days, she said, they ask themselves whether a side of macaroni and cheese is worth the extra $1.99, and often go for refills instead of ordering more expensive large-size drinks.
Zabinski, a professor from Normal, Ill., said they’ll sometimes split a $20 steak and side dish at Texas Roadhouse or a large sandwich from Jimmy John’s. Nonetheless, she said, “our daily and monthly expenditures still seem higher than even two years ago.”
Food manufacturers and restaurants have been offering more deals on some items. J.M. Smucker and Conagra have reduced prices on coffee and margarine, passing through lower costs for coffee beans and edible oils. McDonald’s and Wendy’s said they would offer deals this year aimed at consumers seeking relief from rising prices.
Gary Pilnick, chief executive of WK Kellogg, said the company has been working to market cereals such as Frosted Flakes and Froot Loops to pressured consumers. An ad campaign launched in 2022, for example, encouraged consumers to eat cereal for dinner, pitching it as an easy, inexpensive alternative that, combined with milk and fruit, costs less than $1 per serving. “Give chicken the night off,” the campaign’s tagline says.
Although it is rare for food prices to retreat, it is also unusual for prices to skyrocket as much as they have in recent years, said TD Cowen analyst Robert Moskow. He said he expects grocery prices to decline for a period this year as food makers come under pressure from consumers and retailers.
Kraft Heinz said it is focused on providing affordable options for families, and that while its costs rose 3% in 2023, it raised prices by 1%. WK Kellogg said that before raising prices, the company tries to combat higher costs through greater productivity.
Kellanova said it is working to keep prices as low as possible. Cahillane declined to comment on pricing for his company’s products this year but said that the maker of Pringles and Pop-Tarts hasn’t raised prices to pad its profit.
Cahillane said that as consumers become accustomed to seeing higher prices on supermarket shelves, they will adjust.
“Just like a gallon of gas, it becomes the new price and people get begrudgingly used to it,” he said.
It’s Been 30 Years Since Food Ate Up This Much of Your Income
Ongoing high costs lead food manufacturers and restaurants to keep prices elevated
By Jesse Newman and Heather Haddon, WSJ
Feb. 21, 2024 - 5:30 am EST
The last time Americans spent this much of their money on food, George H.W. Bush was in office, “Terminator 2: Judgment Day” was in theaters and C+C Music Factory was rocking the Billboard charts.
Eating continues to cost more, even as overall inflation has eased from the blistering pace consumers endured throughout much of 2022 and 2023. Prices at restaurants and other eateries were up 5.1% last month compared with January 2023, while grocery costs increased 1.2% during the same period, Labor Department data show.
Relief isn’t likely to arrive soon. Restaurant and food company executives said they are still grappling with rising labor costs and some ingredients, such as cocoa, that are only getting more expensive. Consumers, they said, will find ways to cope.
“If you look historically after periods of inflation, there’s really no period you could point to where [food] prices go back down,” said Steve Cahillane, chief executive of snack giant Kellanova, in an interview. “They tend to be sticky.”
Companies are set to pay more for staffing, after 22 states in January lifted the minimum wage for hourly workers.
In 1991, U.S. consumers spent 11.4% of their disposable personal income on food, according to data from the U.S. Agriculture Department. At the time, households were still dealing with steep food-price increases following an inflationary period during the 1970s.
More than three decades later, food spending has reattained that level, USDA data shows. In 2022, consumers spent 11.3% of their disposable income on food, according to the most recent USDA data available.
Food inflation has raised the ire of President Biden, who took to Instagram during the Super Bowl to blast food makers that he said were providing less bang for consumers’ buck—putting fewer chips in each bag or shrinking the size of ice-cream containers.
“The American public is tired of being played for suckers,” Biden said. “I’ve had enough of what they call shrinkflation. It’s a rip-off.”
David Chavern, CEO of the Consumer Brands Association, which represents major food manufacturers, said the industry offers many choices at different price points. “We hope to work with the president on real solutions that benefit consumers,” he said.
In suburban Chicago, Lisa Wister said her food bills are rising faster than her family’s income, leading them to make their own granola from scratch and pack their own snacks for the movies. “Everything is a negotiation, an analysis about our budget,” said Wister, an occupational therapist. “It’s exhausting.”
Many diners have said they are going out less frequently or skipping appetizers, while buying cheaper store brands more frequently at supermarkets and seeking out promotions or deals offered via apps. That is starting to chip away at some sales for food makers and restaurant operators.
Denny’s, Wendy’s and other restaurant chains told investors this month that their guest counts fell last year compared with 2022 levels as consumers, in particular those with lower incomes, feel the financial pinch. Big food makers including Hershey and Kraft Heinz have reported that their sales volumes declined as prices rose for their products, with several reporting a hit to profits in the latest fiscal year—and others an increase.
Food companies said they are feeling pinched themselves. While commodities such as corn, wheat, coffee beans and chicken have gotten cheaper, prices for sugar, beef and french fries are still high or rising.
Oreo maker Mondelez said in January it would continue raising prices on some of its products this year, largely because of cocoa prices, which earlier in February surged past a 46-year record. Hershey said this month it expects more expensive cocoa to cut into the company’s profit this year. Kraft Heinz said inflation is moderating but that its costs are still higher, driven in part by pricier tomatoes and sugar.
Companies are set to pay more for staffing, after 22 states in January lifted the minimum wage for hourly workers. Hiring skilled workers like mechanics to replace employees who retired during the pandemic is particularly expensive, said Henk Hartong, CEO of Brynwood Partners, which owns 17 food and beverage plants that make Pillsbury cake mixes and other products.
Restaurant chains said they are trying to operate more efficiently to help defray wage increases, but they also expect to raise prices.
“It’s a really fast move and a high percent increase,” Chipotle Mexican Grill CEO Brian Niccol said in an interview, referring to California’s 25% minimum wage increase for fast-food workers employed by large chains, set to take effect in April. “Pricing is going to be part of the puzzle.”
When Anna Zabinski and her husband eat out these days, she said, they ask themselves whether a side of macaroni and cheese is worth the extra $1.99, and often go for refills instead of ordering more expensive large-size drinks.
Zabinski, a professor from Normal, Ill., said they’ll sometimes split a $20 steak and side dish at Texas Roadhouse or a large sandwich from Jimmy John’s. Nonetheless, she said, “our daily and monthly expenditures still seem higher than even two years ago.”
Food manufacturers and restaurants have been offering more deals on some items. J.M. Smucker and Conagra have reduced prices on coffee and margarine, passing through lower costs for coffee beans and edible oils. McDonald’s and Wendy’s said they would offer deals this year aimed at consumers seeking relief from rising prices.
Gary Pilnick, chief executive of WK Kellogg, said the company has been working to market cereals such as Frosted Flakes and Froot Loops to pressured consumers. An ad campaign launched in 2022, for example, encouraged consumers to eat cereal for dinner, pitching it as an easy, inexpensive alternative that, combined with milk and fruit, costs less than $1 per serving. “Give chicken the night off,” the campaign’s tagline says.
Although it is rare for food prices to retreat, it is also unusual for prices to skyrocket as much as they have in recent years, said TD Cowen analyst Robert Moskow. He said he expects grocery prices to decline for a period this year as food makers come under pressure from consumers and retailers.
Kraft Heinz said it is focused on providing affordable options for families, and that while its costs rose 3% in 2023, it raised prices by 1%. WK Kellogg said that before raising prices, the company tries to combat higher costs through greater productivity.
Kellanova said it is working to keep prices as low as possible. Cahillane declined to comment on pricing for his company’s products this year but said that the maker of Pringles and Pop-Tarts hasn’t raised prices to pad its profit.
Cahillane said that as consumers become accustomed to seeing higher prices on supermarket shelves, they will adjust.
“Just like a gallon of gas, it becomes the new price and people get begrudgingly used to it,” he said.
wabbott
DIS Veteran
- Joined
- Aug 4, 2021
https://www.msn.com/en-us/money/com...aring-squeezing-restaurant-owners/ar-BB1jhtxr
The Skyrocketing Costs Driving Cheeseburger Prices Up—and Restaurant Owners Out
Escalating payroll costs and diners’ dwindling tolerance for higher checks are putting independent restaurants in a squeeze
The Wall Street Journal
By Heather Haddon and Ruth Simon
March 4, 2024 - 12:01 am EST
Independent restaurants are facing significant financial challenges, caught in a squeeze between rising payroll costs and diners’ reluctance to pay higher prices. This dilemma has been exacerbated by increases in the minimum wage across 22 states in January, adding to the strain on restaurant owners.
At Chef Zorba’s Restaurant in Denver, owner Karen LuKanic has been forced to make adjustments to cope with these financial pressures. Changes include substituting cheaper ingredients and adjusting menu prices. Despite these efforts, maintaining profitability remains elusive. With Denver’s minimum wage reaching $18.29 an hour and additional employee benefit requirements imposed by Colorado, nearly half of the restaurant’s sales are now allocated to payroll and related costs.
For Chef Zorba’s, a bacon cheeseburger now priced at $15.75, up $5 from 2018, is still not sufficient for profitability. LuKanic expressed that without the security of her Small Business Administration loan, guaranteed by her home, she would consider closing the restaurant. This situation reflects the broader challenges faced by independent restaurants across the country, struggling to navigate a landscape of rising costs and evolving consumer preferences.
The aftermath of the Covid-19 pandemic has reshaped the economic landscape for American restaurants, presenting unprecedented challenges. Despite navigating through lockdowns and supply chain disruptions, restaurant operators now face a new set of hurdles. While food costs and supply chain shortages have stabilized, menu prices have surged, with January data from the Labor Department indicating a 30% increase in prices for food consumed away from home compared to 2019.
Although the surge in food costs has subsided, payroll expenses continue to rise, posing a significant challenge for restaurant owners. According to a survey by Vistage Worldwide, a majority of small-business owners cited escalating labor costs as their primary source of inflation.
Compounding these challenges are shifting consumer habits in the post-pandemic era. Restaurants like Johnny Roger’s BBQ & Burgers in Concord, N.C., face fluctuating dinner traffic, leading to the dilemma of paying idle employees during slow periods. Owner and chef Barrett Dabbs highlights the importance of maintaining customer-facing roles despite cost-saving measures, emphasizing the critical role of these positions in ensuring a positive dining experience.
The dynamics of Johnny Roger’s BBQ & Burgers reflect the shifting landscape of the restaurant industry, where takeout orders have surged to represent a significant portion of dinner business, rising from 20% to 80% since the pandemic. However, the convenience of takeout comes with added costs, with owner Barrett Dabbs estimating an extra $1 per customer due to packaging expenses. To mitigate these costs, Dabbs has implemented price increases and adopted a more streamlined approach, offering utensils and condiments only upon request.
Despite these adjustments, Dabbs is cautious about further price hikes, recognizing the sensitivity of customers to increasing costs. Maintaining affordability is key to retaining foot traffic, with Dabbs aiming to strike a balance between covering expenses and keeping prices competitive. Offering daily lunch specials at a discounted rate serves as a strategic move to attract customers, even if it means operating at a loss in the short term.
While the restaurant industry as a whole is experiencing robust growth, driven in part by takeaway-oriented chains like McDonald’s and Chipotle, full-service dining establishments face ongoing challenges. Labor Department data indicates that fast-food restaurants have fully restored their pre-pandemic workforce, while sit-down restaurants lag behind. Additionally, the surge in wages for restaurant and bar workers since 2021, following years of modest increases, presents a significant hurdle for independent restaurants, especially those that prioritize scratch-made food.
Evan Kelamis, owner of Savoy in Tulsa, has experienced a significant increase in labor costs, despite the city’s minimum wage remaining at $7.25 per hour. This surge, exceeding 16% in 2023 alone, reflects the intense competition for workers, driven in part by opportunities in the gig economy offered by companies like Amazon, Uber, and Instacart. To attract and retain talent, Kelamis anticipates further price increases this year, necessitated by the handmade nature of many of Savoy’s menu items, such as shareable half-pound cinnamon rolls. Traditional pricing methods, where food costs make up around 28% of the customer’s bill, are no longer sustainable, prompting Kelamis to explore alternative pricing strategies.
Meanwhile, at Johnny Roger’s BBQ & Burgers, owner Barrett Dabbs is meticulously scrutinizing every expense to offset rising costs. He made cost-saving adjustments like removing the restaurant’s television to eliminate a monthly cable bill and sourcing cheaper dishwashing chemicals. Dabbs also optimized inventory management by storing excess supplies in his garage until transitioning to a more cost-effective storage solution. Additionally, he leveraged co-marketing events and provided complimentary meals to reduce the expense of the storage space. Despite these efforts, Dabbs highlights the thin profit margins in the restaurant industry, where even small savings can have a significant impact on the bottom line.
Barrett Dabbs, with prior experience as a food and beverage director for local businesses, has implemented various cost-saving measures at Johnny Roger’s BBQ & Burgers. To counter the soaring prices of precut chicken tenders, he now purchases jumbo tenders and splits them in-house. Additionally, he switched to a more affordable brand of ketchup packets and introduced a food truck last year to boost sales without significantly increasing overhead costs. Despite being known for its signature barbecue rub and homemade sauces, the restaurant had to adapt its dessert offerings during the pandemic, replacing labor-intensive soft-serve ice cream with items like banana pudding and chocolate mud pie pudding that can be prepared in bulk. Dabbs also removed homemade onion rings from the menu to streamline kitchen operations and reduce staffing needs.
Labor costs at Johnny Roger’s have surged by approximately 25% since 2019, according to Dabbs, yet many employees still struggle financially. Alex Wagner, the restaurant’s operations manager, has seen his hourly wage increase from $9.25 to $17.35 over six years. However, he contends that expenses have outpaced wage growth, making it challenging to save money. Despite his higher salary, Wagner continues to live paycheck to paycheck and faces obstacles in achieving financial goals such as purchasing a car and improving his credit score. Dabbs has supported Wagner by cosigning the lease for his family’s home, highlighting the financial strain experienced by restaurant workers despite their roles and responsibilities.
Restaurants, as a percentage of sales, allocate more resources to labor compared to other retail sectors, making the increase in wages particularly burdensome on profits. Analysis by the National Restaurant Association reveals that it takes 12 employees to generate every $1 million in restaurant sales, whereas grocery, general merchandise, and clothing stores require only about three employees per $1 million in sales. Independent restaurants face additional challenges in managing costs, as they lack the bargaining power and scale advantages enjoyed by chain restaurants. Labor costs have been rising more rapidly and persistently at independent establishments, especially full-service restaurants, according to data from Gusto, a small-business payroll and benefits provider.
Ed Doherty, a franchisee for Applebee’s and Panera Bread, highlights the advantage of chain restaurants in negotiating prices and managing costs compared to independent establishments. He notes that independent restaurants face greater difficulty in achieving healthy profit margins due to their limited bargaining power and higher administrative expenses. Data from food-industry market-research firm Datassential shows that thousands more independent restaurants closed than opened last year through November, indicating the significant challenges faced by this segment of the industry.
Karen LuKanic, owner of Chef Zorba’s Restaurant in Denver, illustrates the struggles independent restaurants encounter amid rising costs and competitive pressures. Since acquiring the restaurant in 2018, LuKanic has faced numerous challenges, including escalating real estate taxes, energy costs, and incidents of theft. Additionally, compliance with minimum-wage increases and employee benefit requirements has added to her financial burden. Despite raising menu prices by 8% since 2019, LuKanic worries about the impact on customer loyalty and the restaurant’s viability. Personal sacrifices, such as leveraging her house as collateral for financing and forgoing retirement savings, underscore the precarious financial situation faced by many independent restaurant owners.
The Skyrocketing Costs Driving Cheeseburger Prices Up—and Restaurant Owners Out
Escalating payroll costs and diners’ dwindling tolerance for higher checks are putting independent restaurants in a squeeze
The Wall Street Journal
By Heather Haddon and Ruth Simon
March 4, 2024 - 12:01 am EST
Independent restaurants are facing significant financial challenges, caught in a squeeze between rising payroll costs and diners’ reluctance to pay higher prices. This dilemma has been exacerbated by increases in the minimum wage across 22 states in January, adding to the strain on restaurant owners.
At Chef Zorba’s Restaurant in Denver, owner Karen LuKanic has been forced to make adjustments to cope with these financial pressures. Changes include substituting cheaper ingredients and adjusting menu prices. Despite these efforts, maintaining profitability remains elusive. With Denver’s minimum wage reaching $18.29 an hour and additional employee benefit requirements imposed by Colorado, nearly half of the restaurant’s sales are now allocated to payroll and related costs.
For Chef Zorba’s, a bacon cheeseburger now priced at $15.75, up $5 from 2018, is still not sufficient for profitability. LuKanic expressed that without the security of her Small Business Administration loan, guaranteed by her home, she would consider closing the restaurant. This situation reflects the broader challenges faced by independent restaurants across the country, struggling to navigate a landscape of rising costs and evolving consumer preferences.
The aftermath of the Covid-19 pandemic has reshaped the economic landscape for American restaurants, presenting unprecedented challenges. Despite navigating through lockdowns and supply chain disruptions, restaurant operators now face a new set of hurdles. While food costs and supply chain shortages have stabilized, menu prices have surged, with January data from the Labor Department indicating a 30% increase in prices for food consumed away from home compared to 2019.
Although the surge in food costs has subsided, payroll expenses continue to rise, posing a significant challenge for restaurant owners. According to a survey by Vistage Worldwide, a majority of small-business owners cited escalating labor costs as their primary source of inflation.
Compounding these challenges are shifting consumer habits in the post-pandemic era. Restaurants like Johnny Roger’s BBQ & Burgers in Concord, N.C., face fluctuating dinner traffic, leading to the dilemma of paying idle employees during slow periods. Owner and chef Barrett Dabbs highlights the importance of maintaining customer-facing roles despite cost-saving measures, emphasizing the critical role of these positions in ensuring a positive dining experience.
The dynamics of Johnny Roger’s BBQ & Burgers reflect the shifting landscape of the restaurant industry, where takeout orders have surged to represent a significant portion of dinner business, rising from 20% to 80% since the pandemic. However, the convenience of takeout comes with added costs, with owner Barrett Dabbs estimating an extra $1 per customer due to packaging expenses. To mitigate these costs, Dabbs has implemented price increases and adopted a more streamlined approach, offering utensils and condiments only upon request.
Despite these adjustments, Dabbs is cautious about further price hikes, recognizing the sensitivity of customers to increasing costs. Maintaining affordability is key to retaining foot traffic, with Dabbs aiming to strike a balance between covering expenses and keeping prices competitive. Offering daily lunch specials at a discounted rate serves as a strategic move to attract customers, even if it means operating at a loss in the short term.
While the restaurant industry as a whole is experiencing robust growth, driven in part by takeaway-oriented chains like McDonald’s and Chipotle, full-service dining establishments face ongoing challenges. Labor Department data indicates that fast-food restaurants have fully restored their pre-pandemic workforce, while sit-down restaurants lag behind. Additionally, the surge in wages for restaurant and bar workers since 2021, following years of modest increases, presents a significant hurdle for independent restaurants, especially those that prioritize scratch-made food.
Evan Kelamis, owner of Savoy in Tulsa, has experienced a significant increase in labor costs, despite the city’s minimum wage remaining at $7.25 per hour. This surge, exceeding 16% in 2023 alone, reflects the intense competition for workers, driven in part by opportunities in the gig economy offered by companies like Amazon, Uber, and Instacart. To attract and retain talent, Kelamis anticipates further price increases this year, necessitated by the handmade nature of many of Savoy’s menu items, such as shareable half-pound cinnamon rolls. Traditional pricing methods, where food costs make up around 28% of the customer’s bill, are no longer sustainable, prompting Kelamis to explore alternative pricing strategies.
Meanwhile, at Johnny Roger’s BBQ & Burgers, owner Barrett Dabbs is meticulously scrutinizing every expense to offset rising costs. He made cost-saving adjustments like removing the restaurant’s television to eliminate a monthly cable bill and sourcing cheaper dishwashing chemicals. Dabbs also optimized inventory management by storing excess supplies in his garage until transitioning to a more cost-effective storage solution. Additionally, he leveraged co-marketing events and provided complimentary meals to reduce the expense of the storage space. Despite these efforts, Dabbs highlights the thin profit margins in the restaurant industry, where even small savings can have a significant impact on the bottom line.
Barrett Dabbs, with prior experience as a food and beverage director for local businesses, has implemented various cost-saving measures at Johnny Roger’s BBQ & Burgers. To counter the soaring prices of precut chicken tenders, he now purchases jumbo tenders and splits them in-house. Additionally, he switched to a more affordable brand of ketchup packets and introduced a food truck last year to boost sales without significantly increasing overhead costs. Despite being known for its signature barbecue rub and homemade sauces, the restaurant had to adapt its dessert offerings during the pandemic, replacing labor-intensive soft-serve ice cream with items like banana pudding and chocolate mud pie pudding that can be prepared in bulk. Dabbs also removed homemade onion rings from the menu to streamline kitchen operations and reduce staffing needs.
Labor costs at Johnny Roger’s have surged by approximately 25% since 2019, according to Dabbs, yet many employees still struggle financially. Alex Wagner, the restaurant’s operations manager, has seen his hourly wage increase from $9.25 to $17.35 over six years. However, he contends that expenses have outpaced wage growth, making it challenging to save money. Despite his higher salary, Wagner continues to live paycheck to paycheck and faces obstacles in achieving financial goals such as purchasing a car and improving his credit score. Dabbs has supported Wagner by cosigning the lease for his family’s home, highlighting the financial strain experienced by restaurant workers despite their roles and responsibilities.
Restaurants, as a percentage of sales, allocate more resources to labor compared to other retail sectors, making the increase in wages particularly burdensome on profits. Analysis by the National Restaurant Association reveals that it takes 12 employees to generate every $1 million in restaurant sales, whereas grocery, general merchandise, and clothing stores require only about three employees per $1 million in sales. Independent restaurants face additional challenges in managing costs, as they lack the bargaining power and scale advantages enjoyed by chain restaurants. Labor costs have been rising more rapidly and persistently at independent establishments, especially full-service restaurants, according to data from Gusto, a small-business payroll and benefits provider.
Ed Doherty, a franchisee for Applebee’s and Panera Bread, highlights the advantage of chain restaurants in negotiating prices and managing costs compared to independent establishments. He notes that independent restaurants face greater difficulty in achieving healthy profit margins due to their limited bargaining power and higher administrative expenses. Data from food-industry market-research firm Datassential shows that thousands more independent restaurants closed than opened last year through November, indicating the significant challenges faced by this segment of the industry.
Karen LuKanic, owner of Chef Zorba’s Restaurant in Denver, illustrates the struggles independent restaurants encounter amid rising costs and competitive pressures. Since acquiring the restaurant in 2018, LuKanic has faced numerous challenges, including escalating real estate taxes, energy costs, and incidents of theft. Additionally, compliance with minimum-wage increases and employee benefit requirements has added to her financial burden. Despite raising menu prices by 8% since 2019, LuKanic worries about the impact on customer loyalty and the restaurant’s viability. Personal sacrifices, such as leveraging her house as collateral for financing and forgoing retirement savings, underscore the precarious financial situation faced by many independent restaurant owners.
EACarlson
DIS Veteran
- Joined
- Jan 27, 2019
Franchisees generally aren't making all that much depending on the franchise. Way back when I was a Papa John's Pizza manager, the 18 stores that my franchisee owned netted him about $75k a year, total. On top of the actual costs to operate the restaurant you have to pay the franchise fees, commission and meet whatever terms are in your franchise agreement. For my franchisee that meant he had to open a new store at least every two years, whether it was profitable or not. And had to get corporate approval to close stores.
One thing I haven't seen discussed here. It's not just the wages of the restaurant employees that affect the costs. When the minimum wage goes up it also raises the costs for everything before it gets to the restaurant.
tinkerbellandpeterpan
DIS Veteran
- Joined
- Aug 1, 2021
I know Arby's isn't everyone's favorite, but DH and I like it for a cheap lunch and it's close to our work. I hate using an app and would rather order in person. But it is SO much cheaper to do it through the app with the deals they send me that I make myself do it and then we just pick up and eat in the lobby anyway. Last week we had lunch for under $5 for the 2 of us. I'm willing to be a little annoyed for that kind of deal. I'm sure once everyone shifts to the apps then the prices will come right back up and the deals will disappear. For now I will take advantage where I can and just stop going if it gets cost prohibitive again.
LuvOrlando
DIS Veteran
- Joined
- Jun 8, 2006
Gonna keep pressing until we all stop buying and signal elasticity, once people signal more price responsive behaviors it will stop but until then it will just keep climbing. Inflation is a normal thing, it is a price correction. If people want to see prices drop we need to change what we are doing.
By buying unaltered people are signaling their demand is inelastic and will pay whatever the going price will be because they want XYZ sooooo much they refuse to respond so it is good business to exploit that. No-one cares about complaints, if you pay then you accept it.
Want prices of stuff like fast food to drop, cook at home more often and it will level, we are our own worst enemies on this.
By buying unaltered people are signaling their demand is inelastic and will pay whatever the going price will be because they want XYZ sooooo much they refuse to respond so it is good business to exploit that. No-one cares about complaints, if you pay then you accept it.
Want prices of stuff like fast food to drop, cook at home more often and it will level, we are our own worst enemies on this.
mousefan73
Germans are faster at dubbing
- Joined
- May 9, 2012
Seriously in this day and age why would we wanna only pay $1 for a food item? Do we no longer value the ingredients we ingest in our bodies or the workforce that puts it together? Now, I assume many places that have such price levels use it more to get customers in andupsell on other items
Didn’t the dollar menu start like 25 years ago ago? So let’s honestly ask ourselves what we made back then versus right now. So we find if mornal to still pay a dollar.???
Didn’t the dollar menu start like 25 years ago ago? So let’s honestly ask ourselves what we made back then versus right now. So we find if mornal to still pay a dollar.???
Cogswel_Cogs
DIS Veteran
- Joined
- Feb 5, 2005
Inflation?
tony67
DIS Veteran
- Joined
- May 22, 2003
Surprised no one mentioned it (unless I missed it) - Wendy's is testing dynamic pricing - there was a bit of a backlash related to it.
https://www.cnn.com/2024/02/27/food/wendys-test-surge-pricing/index.html
In response they are doing $1 burgers - not that I will be eating them:
https://www.nbcconnecticut.com/news...g-following-dynamic-pricing-backlash/3235641/
https://www.cnn.com/2024/02/27/food/wendys-test-surge-pricing/index.html
In response they are doing $1 burgers - not that I will be eating them:
https://www.nbcconnecticut.com/news...g-following-dynamic-pricing-backlash/3235641/
dizneegirl
Loves the Mouse
- Joined
- Aug 19, 1999
With the McD's app, I've gotten some pretty good deals... last week I picked up a Big Mac and medium fries for $2.89 (the price of the fries).
tony67
DIS Veteran
- Joined
- May 22, 2003
Don't expect most people to understand this simple fact of economics.
Oh and by the way they now want $20+ for it and don't understand why they are going to be replaced by robots.
tinkerbellandpeterpan
DIS Veteran
- Joined
- Aug 1, 2021
You missed it. It was 7 pages long...
https://www.disboards.com/threads/wendys-to-test-surge-pricing.3941032/
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