The Skyrocketing Costs Driving Cheeseburger Prices Up -- and Restaurant Owners Out

[dalton99a]

https://www.wsj.com/business/hospitality/restaurants-food-payroll-bars-wages-f21ceb0a

https://archive.ph/pi9Vj

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
By Heather Haddon and Ruth Simon
March 4, 2024 12:01 am ET

...

By some measures, U.S. restaurants are booming. The National Restaurant Association, an industry trade group, forecasts U.S. food-service sales will hit a record $1.1 trillion this year, up 5% from 2023 levels. Employment in restaurants and bars, which fell around 2.4 million jobs at the end of 2020 after the pandemic struck the U.S., have returned to precrisis levels, Labor Department figures show.

McDonald’s, Chipotle and other takeaway-oriented chains have emerged as long-term winners, while many sit-down establishments struggle. Such full-service dining operations haven’t regained all the workers they had before the pandemic, Labor Department data show, while fast-food restaurants are again fully staffed. Sales for fast-food and other limited-service restaurants grew by more than a third from 2019 to 2023, around twice the rate as sit-down restaurants, according to National Restaurant Association estimates.

As a percentage of sales, restaurants rely on labor more than other retail sectors, making the rise in wages particularly draining on profits, according to industry economists. It takes 12 employees to generate every $1 million in restaurant sales versus roughly three employees at grocery, general merchandise and clothing stores, according to analysis by the National Restaurant Association.

Independent restaurants are less able to spread out administrative costs and command volume discounts. Labor costs have been rising faster and longer at independent restaurants than in the economy as a whole, with full-service restaurants seeing the biggest increases over the last year, according to an analysis by Gusto, a small-business payroll and benefits provider.

...

[Bengus81]

1. They never mention their 14% tax cut windfall they recieved SEVEN YEARS ago.

These larger chain burger joints have saved BILLIONS from those tax cuts.

[jimfields33]

4. It's still cheaper to go to a chain restaurant then a mom and pop.

I’m sure most of the revenue increase is from the chains. I’ve gone to mom and pop restaurants for a burger, fries and drink and it’s 25 bucks. At McDonald’s it’s 17. So you do save going to a chain.

[Happy Hoosier]

10. Where do you live?

The most expensive McD's burger meal near me is $11.... that the double quarter-pounder with bacon.

[Torchlight]

11. lol

dtl

[Johnny2X2X]

2. Restaurant work is tough

It's hard work with sporadic hours and most places don't offer any benefits. I am friends with several restaurant owners and it's been a fight for them to keep good staff. I think what we saw during Covid was that people working restaurants realized they could get better gigs in warehouses. Ones that guaranteed 40 hours, $20 an hour or more, some benefits, and a more reliable life. So people now have other options, they aren't going to work part time as a line cook for $13 an hour anymore.

[sinkingfeeling]

3. I don't believe eggs are selling at 297% over 2018. I can buy a dozen for $.99.

[Act_of_Reparation]

8. A dozen large eggs at my local grocery store is $2.59

Perhaps one shouldn't base their beliefs on anecdotal evidence.

[sir pball]

9. Egg prices are finally coming down, but Eggpocalypse was very real

https://dc.eater.com/2023/1/19/23561631/spike-egg-prices-dc-food-industry

[Aristus]

5. The American people are getting a crash course in what happens when prices, kept artificially low for decades

through depressed wages and stagnating incomes, suddenly go up to what they should have been the whole time. The workforce will ultimately prosper as a result of realistic wages. But it's going to cause whiplash among people used to seeing rock-bottom prices on everything that human labor produces.

[Hotler]

6. Nature of the free markets, no whinning. That's what they tell us consumers. nt

[Cuthbert Allgood]

7. You pay more at a local restaurant than McDonalds because the local one is good.

There's a place for fast food, for sure. But the cooking and quality of product is going to be better, for the most part, at the local joint. Yeah, the consistency is not the same, but that's the result of salt, fat, low end products, etc.

Support your local place even if it costs a little bit more.

[elocs]

12. I haven't been to a restaurant in 4 years now and have no plans to go to one.

I buy my food with my SNAP EBT card, the healthy food benefits from my Medicare Advantage plan, or the food pantry. I eat far more healthy than I ever would at a restaurant and don't miss them at all.