| JurisDictum |
10-03-2021 03:03 AM |
Quote:
Restaurants' Fragile Recovery Is Fizzling in the. U.S
...
The industry is raising the alarm. Its main lobbying group this week called on Congress for more aid to help meet payroll and pay down debt, citing a survey showing that a majority of restaurant operators have seen business conditions deteriorate in the past three months. Like many companies around the world, food-service firms are also hit by supply-chain bottlenecks.
Underscoring the surge in expenses, a closely watched price gauge hit its highest since 1991 in August, driven by energy and food, the Commerce Department said Friday.
Advertisement
Article content
“Our kitchen labor costs are up 20%, maybe more,” said Jeff Katz, partner at Crown Shy and Saga in New York City. “The question is, how much more can the customer handle. We haven’t raised our prices yet, but these costs are real.”
The rebound has been shaky and uneven across the country, even for national chains.
Darden Restaurants Inc., which has about 870 Olive Garden locations, said last week that sales bounced back slightly in September after falling off in August. Georgia and Florida have seen pressure from the delta variant in recent weeks, Chief Executive Officer Gene Lee said on a conference call. But California locations are getting better.
Large public-traded companies including Chipotle Mexican Grill Inc. and McDonald’s Corp. are scheduled to report quarterly earnings in October. While the recovery in fast food has been stronger, with brisk sales via drive-thru and takeout options, costs and the lack of workers are eating into profitability.
Advertisement
Article content
“The biggest headwind is pure availability of labor,” said Credit Suisse analyst Lauren Silberman. “That’s all weighing on margins.”
|
Socialism for the well off. Rugged individualism for everyone else.
Remember like a few months ago when everyone was all about "well this is a crisis so we have to spend money." It was literally the day after Trump lost that Fox turned on the dime and started talking about the debt again.
This connected. You continually bail out industries and expect people to respect of the sanctity of a balanced budget. They clearly don't think its going to cause all the bad things they are claiming it will -- or they would stop doing this.
Edit: One of the problems with an economy like the United States -- is it makes controlling expenses a very lazy endevor. When business is used to leaning on wage cuts -- they end up with no ability to increase profitability of the company once they can no longer do this. Somehow McDonald's is doing fine in Denmark with a minimum wage of $20 (and probably pays into healthcare). A Big Mac is like $1 more in Denmark.
|