On the flip side, the labor pool shortage is probably the biggest single pain point for Foodservice operators. The good news is that consumers have steadily shifted to dining out more often but there’s a level of unpredictability in how often and where they are dining.
All items
Food away from home
Food in home
Full-service and fine dining restaurants have a higher labor cost percentage than fast casual or QSRs do. As a result, operators remain sensitive to contract pricing. They must take into consideration their labor costs. Their questions are: Can I afford to attract help by increasing hourly wages? How can I keep menu item prices down? Is shrinkflation the way to go so I don’t lose customers? And ultimately, how can I squeeze margin from my suppliers? Unfortunately, the labor shortage impacts manufacturers from the operator’s perspective as well.
To combat this, CP manufacturers must choose between 1 of 3 pricing strategies: cost-adjusted, market-aligned and elasticity.