BROPHY'S SANTA BARBARA
When you bring together 1,400 opinionated restaurant leaders for a three-day groupthink, the first in 32 months, you’re sure to get an earful about the industry’s challenges and opportunities. The flow of ideas at this year’s Restaurant Leadership Conference was powerfully driven by what was described as pent-up demand for peer-to-peer networking.
Supply-chain problems were as likely to arise in presentations and casual conversations as the labor shortage and galloping inflation. The consensus seemed to be that to-go packaging is the hardest staple at the moment to secure. But attendees also complained about periodic shortages of just about every food ingredient, with special dismay reserved for the challenge of lining up sufficient supplies of poultry products.
When attendees ventured out for lunch or dinner at one of the restaurants that abound in Scottsdale, they got a close-up view of how those shortages can frustrate customers. It was not unusual for servers to caution patrons while taking their orders that they’d have to see if the requested item was in stock.
At the airport used by most attendees traveling by plane, full-service places posted menus with all the missing items blacked out. The bills of fare looked like a checkerboard!
Joe Pawlak, managing principal for Technomic, targeted shortages as a key reason for the sharp inflationary spike restaurateurs are seeing in the cost of their supplies. The price of cooking oil is up 39% year over year, while beef costs have climbed 41% and the wholesale price of chicken has spiked by 36%.
Customers, however, are not balking at higher prices—at least for now. Despite a nearly 40-year high in menu price inflation, consumers are still willing to pay what they’re charging.
Pawlak and other presenters said that consumers have been willing to accept those increases because their pent-up demand for restaurant meals is overriding their usual price sensitivity. Indeed, according to Robin Robison, COO of Modern Market and Lemonade parent Modern Restaurant Concepts, that willingness to pay more is the industry’s best defense against galloping inflation.
But speakers warned that a day of reckoning may be coming. “Prices are getting higher and higher,” Pawlak said. “At what point does the consumer balk?”
BROPHY BROS.
Photo Credit Kcruts Photography
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BROPHY BROS.