Leaders.com
  • Login
  • Subscribe
  • Business
  • Leadership
  • Wealth
  • Master Classes
  • Business
    • Entrepreneurs
    • Executives
    • Marketing and Sales
    • Social Media
    • Innovation
    • Women in Business
  • Leadership
    • Personal Growth
    • Company Culture
    • Public Speaking
    • Productivity
    • Hiring
    • Social Issues
    • Leaders
  • Wealth
    • Investing
    • Cryptocurrency
    • Retirement
    • Venture Capital
    • Loans and Borrowing
    • Taxes
    • Markets
    • Real Estate
  • Master Classes
  • Login
  • Subscribe
Markets

Food inflation is hitting restaurants, but strong businesses can navigate the difficulties (Andrew Francis Wallace/Toronto Star via Getty Images)

By Tyler Hummel Leaders Staff

Tyler Hummel

Tyler Hummel

Tyler Hummel is a news writer for Leaders Media. He was the Fall 2021 College Fix Fellow and Health Care...

Full bio


Learn about our editorial policy

May 23, 2023

How Struggling Restaurants Beat the Economy 

Food inflation has caused restaurant prices to skyrocket, but the best restaurants have survived by offering quality experiences and excellent customer service. 

Key Details

  • Food prices have been among the most affected by inflation, with an 11.4% increase between 2021 and 2022 and 7.7% in the past year. 
  • Among the worst affected have been restaurants, which have reportedly seen an 8.6% increase in prices in the past year. 
  • The effects of this increase in restaurants are having far-reaching effects on menu prices, with many restaurants having increased what they charge by 20% to 25% in the past year to accommodate rising commodity costs as well as increased labor rates and expenses.

Why It’s Important 

The COVID-19 pandemic has done serious damage to the U.S. small-business economy. In a June 2021 interview with MSNBC, Vice President Kamala Harris claimed one-third of the small-business economy was destroyed by COVID-19, which Politifact, a website that rates the accuracy of claims by elected officials, confirmed to be 37.5%. This was true of restaurants as well, which saw more than 72,000 permanent closures. 

The subsequent skyrocketing inflation has done additional damage to the restaurant industry, as labor shortages and rising commodity prices have created poor incentives for continuing to operate a restaurant in the current economic climate—an industry where 80% of businesses tend to fail within their first five years under ideal conditions. 

Mark H. Brezinski is an author and restaurateur. He tells Leaders Media that there is no singular factor for success in the current economy. His town of Dallas has seen persistent growth and demand, shielding many of his businesses and colleagues from some negative consequences of the current economy. The restaurant industry is a dynamic business, and food inflation is not always just caused by one or two factors. Restaurant owners simply have to experiment and find the ceiling for how much they can charge without alienating customers. 

“People think you pay more for a steak, so you charge more. You have to raise prices because labor prices are going up too. Managers are being pinched by inflation, and you have to pay them more to keep them. Prices are a bit of smoke and mirrors because they’re based on an insidious number of factors,” he says. 

Possible Solutions 

Brezinski says that many restaurants that have survived COVID and high inflation are the ones that foster an excellent quality experience and customer service. Customers who are feeling their pockets tighten have no choice but to pick their restaurants selectively and are choosing great restaurants over mediocre ones. 

Convenience and inexpensive prices helped fast food and fast-casual restaurants survived the market through flexibility and embracing delivery apps. High-end sit-down restaurants do not have this option. They have to compete by offering the best experience possible. 

“The people I know with full-service restaurants really emphasized quality. If you’re going to raise prices, you better emphasize hospitality and appreciation for customers. You can provide a better service and become more takeout friendly. My friends with good reputations and mature businesses weathered the storm incredibly well. They say they’re doing better now than before the pandemic. People have gotten back to going out really quickly in our markets,” says Brezinski. 

“At some point, if you’re not performing or executing your brand as well as somebody else, and if people are going out less, there will still be a line at the most popular place. A mediocre restaurant will lose out. Customers will subconsciously reduce these places in their restaurant rotation to the best of the best.”  

Home / News / How Struggling Restaurants Beat the Economy 
Share
FacebookTweetEmailLinkedIn

Related Stories

Fortune 500 Reveals Economic Changes 

by Hannah Bryan Leaders Staff
Wealth

3 hours ago

Fortune 500

Fortune released its annual list of the 500 largest companies in the U.S., revealing the continued success of many big names along with a few changes.

Key Details

  • The 69th annual Fortune 500 list, which ranks the 500 largest companies in the U.S. by revenue, revealed that Walmart still tops the list. 
  • While companies like Walmart have remained at the top of the list for over a decade, this year’s list shows that oil companies are rising again after a brief dip.
  • Healthcare companies are also rising, urged on by growing demand for pharmaceuticals and healthcare needs, Fortune reports. 
  • The report also found that companies on the list are increasingly located in Texas and leaving California and New York. 

Go deeper

FacebookTweetEmailLinkedIn

YouTube To Permit Election-Fraud Claims 

by Tyler Hummel Leaders Staff
Social Media

3 hours ago

YouTube, the world’s largest video-sharing website, has announced that it will widen its policies to permit controversial political speech during the upcoming election cycle. 

Key Details

  • On June 2, YouTube announced in a blog post that it will be scaling back on its policy to suppress “election misinformation” as the 2024 election season approaches. 
  • YouTube says that it has re-evaluated its policies and realized that curbing misinformation came at the expense of harming political speech and having little effect on reducing real-world issues in the process. 
  • The platform will continue to prioritize authoritative sources and punish sources that purposely mislead voters with claims that discourage eligible voters or misdirect them on how to vote. The platform will also continue suppressing hate speech, violence incitement, and harassment.

Go deeper

FacebookTweetEmailLinkedIn

Apple’s Vision For the Future

by Hannah Bryan Leaders Staff
Tech

3 hours ago

At Apple’s World Wide Developers Conference, the company unveiled updates to its iMac, iPhone, iPad, and Apple Watch models, but the announcement with the most buzz was the unveiling of the Apple Vision Pro.

Key Details

  • On Monday, Apple announced updates to its current iMac, iPhone, iPad, and Apple Watch models, including changes to voicemail options and data processing. 
  • However, tech enthusiasts eagerly awaited Apple’s long-promised virtual-reality headset unveiling. 
  • The Apple Vision Pro is an augmented-reality headset that Apple CEO Tim Cook will usher in a new era of spatial computing. It will be available for sale early next year for $3,499.
  • The device allows the user to do many of the same tasks he would perform on his laptop on a virtual screen.
  • Apple promoted the product for various uses, including in the office, working remotely, watching movies, and gaming. 
  • “So in the same way that Mac introduced us to personal computing and iPhone introduced us to mobile computing, Apple Vision Pro will introduce us to spatial computing,” Cook says.

Go deeper

FacebookTweetEmailLinkedIn
pickleball
Entertainment

4 hours ago

America’s New Favorite Pastime

by Hannah Bryan Leaders Staff
Markets

5 hours ago

Driving Down the Price Of Eggs 

by Tyler Hummel Leaders Staff
manufacturing
Productivity

5 hours ago

A Strategic Push To Manufacture In the U.S.

by Hannah Bryan Leaders Staff

Recent Articles

Personal Growth

9 hours ago

The Executive’s Secret Weapon: Morning Meditation for Increased Productivity and Focus

Learn why leaders and executives practice morning meditation for performance.

Leadership

Jun 1, 2023

Transforming Impulsive Behavior: Unleashing the Disciplined Leader Within

Impulsivity can cause financial problems, reputation damage, and legal issues.

Leadership

May 31, 2023

Self-Sacrificing and Hate Attention? You May Be an Echoist, the Opposite of a Narcissist

An echoist, the opposite of a narcissist, is selfless, but lacks boundaries and self-esteem.

  • Business
  • Leadership
  • Wealth
Join the Leaders Community

Get exclusive tools and resources you need to grow as a leader and scale a purpose-driven business.

Subscribing indicates your consent to our Terms & Conditions and Privacy Policy

Leaders.com
  • Privacy Policy
  • About
  • Careers
  • Cookie Policy
  • Terms
  • Disclosures
  • Editorial Policy
  • Member Login

© 2023 Leaders.com - All rights reserved.

Search Leaders.com

x