Prices Are Starting To Rise

A couple of interesting stories came out today in the restaurant industry.

One, which is not such good news for Subway, being that Jarrod’s house got raided this morning in connection with an investigation into child pornography. That will certainly bring on some unexpected brand damage.

The other being that Starbucks is raising prices on coffee even though coffee prices, as a commodity, are going down. It’s not a huge increase. An article on nrn.com stated that some drinks will increase 5-20 cents. For example a large coffee will increase by 10 cents. But you add in the additional spread from the decrease in commodity cost then that can add significant profit.

The article sites that most consumers won’t notice the increase as most of their most popular drinks are not going to be affected by the price increase. Also food items will not incur an increase. The increases will vary by area of the country and the product.

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This is just the beginning of a trend that we’ll be seeing for the foreseeable future. With all the pressure from the Affordable Care Act and increases in minimum wage, restaurant operators are running out of options. You can only cut product and labor costs so much without affecting quality in a way that upsets your customers. Consumers will just have to live with the fact that going out to eat is going to cost more money.

We will also have to get used to less human interactions and more digital ordering either through an app or an onsite kiosk, and even a robot cooking their burger and fries. At the NRA Show this year we saw some neat things, including robots. Click here to check out a previous blog post on neat things from the NRA Show.

Restaurant operators will have to embrace more technology to help run more efficient operations and to cut down on labor intensive tasks. Also they will need to take a look at their operations and make sure they are running as efficiently as possible and are using data to drive decisions.

Learn how to write SMART Pre-shift Inspections at a free webinar next Tuesday at 3 PM CST. Click here to register. The webinar will focus on helping your managers run great shifts every day, creating a better customer experience and increased profits.

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