More restaurants struggle to remain open with rising costs

[MrDawn]

What are your thoughts on this?

To view this content we will need your consent to set third party cookies.
For more detailed information, see our cookies page.

Accept third party cookies

Crafted is a local restaurant that serves poke bowls, coffee, and other items. The owner says this is the slowest fall and winter they have had.

“We typically see a downturn, but it is a lot lower than we expected,” owner Michael Brotemarkle said. “The last couple of months have been kind of, you know, just, hey, what can we do to survive.”

He says restaurant owners learn to ride waves, but this is different.

Brotemarkle says the price of food has skyrocketed, and inflation affects everyone and everything. Customers also say they have less disposable income, so they are choosing to save money by eating at home.

Adam Mills, president of the Kansas Restaurant and Hospitality Association, says revenue is up, but headcount and profitability are down. The cost of goods sold and labor costs are also up.

“All of this is manageable, but the restaurant business is a labor-intensive business with low profit margins anyway,” Mills said. “When inflationary pressure is applied, it makes it difficult to operate.”

He says restaurants cannot easily absorb or pass on cost increases.

“The typical small business restaurant runs on a 3-5% pre-tax margin,” Mills said. “Food and labor costs are the two most significant line items for a restaurant, each accounting for approximately 33 cents of every dollar in sales. Other expenses – typically non-controllable costs like credit card swipe fees and occupancy costs – generally represent about 29% of sales. For the vast majority of restaurant operators, the costs in these three categories have increased significantly in recent years.”

https://www.ksn.com/news/local/increased-costs-causing-local-restaurants-to-struggle/

 

[zappaDPJ]

It's the same here in the UK. Covid and rampant inflation has really taken a toll on the industry as a whole.

Thousands of restaurants closing across UK blame soaring bills among pressures

Hospitality industry says it is crumbling under joint pressures of rocketing energy bills amid cost of living crisis, as well as after-effects of Covid and Brexit

www.independent.co.uk

 

[MrDawn]

It's the same here in the UK. Covid and rampant inflation has really taken a toll on the industry as a whole.

I wonder if lowering prices nationally would fix a lot of these problems?