Tim Cundy’s Post

🔺 Inflation is Straining Restaurant Operations 🔺 The sharp rise in food and labor costs is dramatically impacting restaurant profitability. Wholesale food prices have soared by 13.2%, and labor costs have risen by 15.1% from December 2020 to December 2021. With restaurants operating on tight pre-tax margins of just 3-5%, these increases are unsustainable. 💼 Key Challenges: • Food and labor costs each take up around 33% of every dollar in sales. • Rent, utilities, and other operating expenses account for 29% of sales. • 88% of operators report higher food costs as a percentage of sales compared to 2019. At MTIPLY, we understand these challenges. Our solutions help restaurants maximize their wholesale food ingredients and improve sales by adding virtual restaurants. By leveraging our innovative strategies, you can navigate these tough times and boost your bottom line. 📈 Interested in learning how MTIPLY can help your restaurant thrive? Let’s connect and discuss how we can support your success. https://lnkd.in/gZVVvNjB #RestaurantIndustry #FoodService #VirtualRestaurant #Inflation #MTIPLY See Article Below👇 https://lnkd.in/gTjmXt3g

Inflation may be easing, but restaurant owners are still grappling with high prices. Despite the decline in inflation rates, local venues are charging more. For example, a simple cup of coffee now costs $6.50 in the CBD, up from $4 recently. Local venue owners express frustration over the ongoing need to keep prices high. Rising leasing costs, coupled with interest rate hikes, have squeezed already narrow profit margins. Despite efforts to absorb these increases, businesses find themselves gradually passing on expenses to customers. The impact of rising raw material costs is also significant. Beer kegs have surged from $300 to $400, and essentials like fruits, vegetables, and meat have seen substantial price hikes. These mounting expenses compel businesses to carefully adjust their pricing strategies to remain viable. The challenge is balancing affordability for customers while ensuring business sustainability. Regular price adjustments are crucial for covering operational costs and maintaining quality. However, merely passing these costs onto consumers risks alienating price-sensitive patrons and potentially decreasing foot traffic and revenue. Ultimately, this situation highlights the complexities businesses face in setting menu prices. Value-based pricing can help address these complexities. 

Some really interesting data on fast food prices over the past year. On average, 8% of the menu items see a price increase month-to-month. Oh, but there's California. One would think that given the markups taken following the announcement of the new $20 minimum wage that prices wouldn't increase that much in April. However, a whopping one-third of menu items were priced higher compared to the month previous. Add to this the decline in PERCEIVED uniqueness of offerings. So not only are customers paying more for their burgers, subs and salads, but there's fewer exciting new items to choose from. My guess is that restaurants are hunkering down with their core offerings given people's reluctance to pay more for fast food, and "new" product offerings are simply recycling the same ingredients. Not to say this can't work - Subway has been killing it with basically the same ingredients repackaged in Eat Fresh, Refresh - but customers typically don't consider something unique if it's using ingredients from other menu items. Thoughts? Would love to hear from my QSR friends. Source: Datassential

Inflation may be easing, but restaurant owners are still grappling with high prices. Despite the decline in inflation rates, local venues are charging more. For example, a simple cup of coffee now costs $6.50 in the CBD, up from $4 recently. Local venue owners express frustration over the ongoing need to keep prices high. Rising leasing costs, coupled with interest rate hikes, have squeezed already narrow profit margins. Despite efforts to absorb these increases, businesses find themselves gradually passing on expenses to customers. The impact of rising raw material costs is also significant. Beer kegs have surged from $300 to $400, and essentials like fruits, vegetables, and meat have seen substantial price hikes. These mounting expenses compel businesses to carefully adjust their pricing strategies to remain viable. The challenge is balancing affordability for customers while ensuring business sustainability. Regular price adjustments are crucial for covering operational costs and maintaining quality. However, merely passing these costs onto consumers risks alienating price-sensitive patrons and potentially decreasing foot traffic and revenue. Ultimately, this situation highlights the complexities businesses face in setting menu prices. Value-based pricing can help address these complexities. #pricingnews #taylorwellspricing Source: https://lnkd.in/g9AJaakh

I saw this post by Joe McFarlane, whom I have never met but immediately liked when I read his post at the bottom. First my own view: I was debating with my friends yesterday about the state of the economy and how things do not make sense. This example of food below is precisely what I am talking about. Below are a few stats, which you can validate for yourself (Fed, Fannie Mae, etc), that outlines how serious of a negative financial state we are in: First, the Buy Now Pay Later (BNPL) industry 1-As of fall 2023, about 9% of consumers used BNPL, which is a 40% increase from two years earlier. 2-In 2024, BNPL is expected to drive up to $84.8 billion in consumer spending, which is about 13% more than 2023. Between January and April 2024, BNPL platforms were used for a record $25.9 billion in e-commerce spending, which is an 11.8% increase from the previous year. BNPL funding for groceries also increased by 40% between early 2023 and 2024. (Dan Note: Groceries!!!!!!!!! 40% more people buy basics to live daily through BNPL. People can not afford their basics in life) 3-The US BNPL market size was valued at $3.55 billion in 2024 and is projected to reach $25.30 billion by 2033. Now combine that data with how well we are saving in the USA (Hint: Not well) 1-The personal saving rate in the United States has been decreasing in recent years, and as of February 2024, it was at its lowest level in over a year. The personal saving rate is the percentage of personal income that American households save after taxes and expenses, and is tracked monthly by the Bureau of Economic Analysis. In February 2024, Americans saved 3.6% of their disposable personal income, which is down from 5.3% a decade ago and below the average before the COVID-19 pandemic. This rate is also lower than the long-term average of 8.46%. Now personal data from yesterday (I was at the land of Disney in Florida): 1-Uber/Lyft too and from cost just over $142 (9 people) 2-Park hopper passes for 1 day cost $2,169 (9 people) 3-Lunch $86.31 (5 people) 4-Dinner $71.28 (6 people) 5-Misc drinks (mostly water) throughout the day $79 6-Dessert $59.57 (6 people) 7-Tank top because of a wardrobe malfunction $37 7-Total for a single day of Disney Parks FL with between 5-9 people depending on the time of day $2644 The long and short is that costs are going up, and more people than ever don't have savings in their bank accounts. Now that they have burned through those bank account savings over the last couple of years, they are turning to BNPL. This bubble will be popping in the next 18 months.

https://ow.ly/mqlA50RfGYS Consumers are not happy about the surging prices in #FastFood #restaurants? If #labor cost is an issue, will it be cheaper to eat at a robotic #restaurant? #HR #HRM #Economy #Inflation #Market #FoodBiz #Retail

Another reason to avoid fast food if you can. Paying too much for food that is typically lower in quality. Fast food meal price inflation has skyrocketed by 41% since 2017. By comparison, average hourly earnings of non-manager jobs have increased by only 36% during the same time. Over the last 4 years, fast food prices have increased by 31% versus the average hourly wage surge of 25%. Meanwhile, over the last decade, prices at McDonalds, $MCD, have DOUBLED. Since the pandemic, fast-food restaurants have seen larger price hikes than grocery and gas prices. Fast food is no longer affordable.

Prices continue to rise for restaurants as inflation and other market pressures affect the business needs of individual establishments, but a key part of this equation is customer tolerance for price increases. More often than not, customers don't mind paying more if it means they get a great experience. #RestaurantLeadership #RestaurantSuccess #Inflation

💰Menu prices have risen faster than inflation and now consumers are feeling the financial pinch.. Our latest reports reveal how both American and Canadian diners are increasingly sensitive to menu price hikes (and just how high they’re willing to go). Learn more about today’s cost-conscious consumers and the implications for the restaurant industry 📈🍽️ Download our Canadian 🇨🇦 report: https://bit.ly/3PRPryC Download our American 🇺🇸 report: https://bit.ly/4cP2cUP

I buy groceries and cook for myself. Besides buying whole grains, low-fat meat and fish, fruit and vegetables, here are a few tips I have over time found advantageous: 1. Aldi is able to sell meat inexpensively because the company cuts down on expenses in several ways. Aldi buys meat from regional farms, avoiding big brands and lowering costs. They source meat locally and are able to save on transport-related expenses. Aldi's small amount of stock reduces food waste, and stores keep a limited number of employees on payroll, which saves even more money. Aldi does not sell name-brand products, and they do not have in-house butchers, so lower labor costs mean lower prices. 2. Kroger (Pick n Save, Ralphs) sale prices are good but be sure to join as a member. You then just input your phone number to get discounts. Also, once a month you will get coupons and these are generally coupons for products you have purchased in the past. 3. Costco has high quality but perhaps too large quantities when it comes to grocery shopping. Best deal? Their $5 whole chicken baked multiple times each day. I can get 4 meals out of that chicken. And they have a very low-priced vodka that rivals Grey Goose - in terms of processing and distilling it is indistinguishable. Terrible waste of money going to restaurants and fast food joints. In addition you get far more fat, sodium and calories than you should. Eat well and exercise regulary. Don't smoke and get your BMI down to a healthy level. If you still die young it was because you weren't careful about picking your parents. https://lnkd.in/gcfdrkES