Every industry, small or large, has taken a hit from the supply chain chaos – the restaurant industry being one of the hardest hits. Whether it’s delays in food orders, product shortages, or no-shows, your operation has faced tremendous hardship over the past two and a half years.
96% of operators report delays in the supply chain and many of these delays are related to labor-associated bottlenecks, according to Associate Prof. Brian J. Warrener at Johnson & Wales University.
We’re short at all points of the supply chain including staff and compensation, which causes high unemployment rates and issues with domestic transportation. Even production has been reduced due to demand, transportation and logistics, and storage.
How is the restaurant industry affected by this, you ask? In many ways.
inflation, menu prices, and portion control
There is a 16.3% increase in food cost inflation. Fish, chicken, and turkey are all up 25%. Cooking oil is up 49% and eggs are up a whopping 160% — I mean, this sounds insane, right? But it’s all true. How are operators like you supposed to continue along when your basic every day essentials are largely inflated?
Increased menu prices and minimizing menu sizes has been an ongoing trend – sometimes a shock to customers but necessary.
Menu inflation is up 7.2% as of April 2022, according to Technomic, which sets a record high since 1982. Operators have no choice but to increase their dish prices.
Maybe you’ve even downsized on your portions or are charging a kitchen fee. I can assure you one thing—there’s nothing to be ashamed of. We’re all experiencing these challenges together.
But the challenges aren’t just limited to supply chain. Distributors are experiencing labor shortages in their factories and manufacturers can’t find workers to do production. It’s an ongoing cycle.
NOt all about the supply chain
Unfortunately, the result of what seems to be a never-ending crisis is altering the way people spend their money. 37% of consumers are going to restaurants less often due to the impact of rising prices, according to Technomic. 46% are buying less goods and 32% are driving less often.
It all comes down to money. When people are underpaid it can result in them quitting their jobs. When there’s high demand and less people to meet said demand, you’re going to have to start paying more. This goes for both for products and for employees.
The supply chain chaos will continue on for months, maybe even years, and unfortunately, businesses may not see relief anytime soon. This means it’s time to start reshaping the way we operate – for the better.
how to alleviate the strain
Whether that’s implementing technology or partnering with companies like Dining Alliance to help you save on thousands of items you’re already buying. By becoming a Dining Alliance member, you get access to industry leading technology that can help alleviate some of the labor challenges and give you deeper insight into your purchasing behaviors. Without change, you won’t be able to move forward and successfully navigate through the supply chain chaos.
Join Dining Alliance today for free and partner with supply chain experts who can help you get ahead of the game.
