Restaurant Chains Expected to Raise Menu Prices In Second Half of 2013

Chain restaurant leaders are optimistically watching traffic and sales, with expectation of raising menu prices later this year, according to a new survey conducted by supply chain cooperative SpenDifference.   he company last surveyed chains on menu price topics in late 2012.

The study, completed the week of May 13, found that nearly two-thirds of chains (64 percent) held the line on menu pricing during the first quarter, raising prices 0.5 percent or less. However, more than 90 percent anticipate upping prices this year an average of 1.6 percent. One-third of respondents expect increases of 2 percent or more. Less than 10 percent plan no increases, which is much lower than last year.

Chain executives are optimistic about 2013, anticipating same-store sales growth of 2.2 percent, which would be about 25 percent higher than 2012. With first quarter sales essentially flat, all of the growth is expected in the final three quarters of the year. Executives predict 75 percent of this growth will come from price increases, with the remaining coming from stronger traffic.

“From the data and discussions with our members, it appears that they believe consumers may be more willing to accept higher prices, especially with the economy strengthening,” says Brad Moore, SpenDifference senior vice president. He adds that operators also recognize that they must cover a larger portion of inflation to meet their bottom line. “But even the larger price increases they are planning this year will only cover about 75 percent of expected menu inflation, which they forecast at just under 2 percent.” Chains are renegotiating contracts more frequently, with nearly 75 percent identifying that as their top cost-control strategy. About 60 percent are looking at promoting limited-time offers or existing menu items with better margins.

“The reality, though, is that most chains—especially mid-size ones—cannot further reduce costs significantly on their own, given their limited personnel and leverage in the marketplace. This is where organizations like ours pay big dividends,” Moore says. “To protect or improve their margins, operators need to look beyond menu price increases and contract negotiations, and find other ways to save money in their supply chains.” Respondents were evenly split among full-service and limited-service concepts and represented chains with fewer than 100 to more than 800 domestic units.

Back

What Clients Say About Patrice & Associates

  • David Israel was a pleasure to work with and was instrumental in helping me find an excellent career opportunity .

    David was extremely professional and took the time to really listen to where I was in my career and what I was looking for. As a result of the work he did to connect me with the right opportunity, I was able to obtain a great starting salary and great benefits as well. I would highly recommend David’s services to both job seekers and employers. Josh Axmacher David Israel was a pleasure to work with!
  • Tim was nothing but helpful from the start!

    I was originally contacted by Tim as a reference for someone who used to work for me. He must have recognized that I myself was a good fit, because within a few minutes the conversation turned to me applying for the job.  He was always pushing for me. He was there to help with everything, every step of the way, and was in constant communication. He played a massive role in me landing an amazing job with an even better company. I can't stress enough how awesome this guy was. Tim will coach you through the entire process and be your biggest advocate. He has a lifetime of experience and knows exactly what companies are looking for. A+, 10/10, two thumbs up, 5-stars. Thanks for everything Tim! Brock Kinley Tim was nothing but helpful from the start
  • Tim was very patient and thorough when going through the process of trying to find employment for me and my skills. I appreciate the time and effort he put in for me and I would recommend Tim Walker & Patrice and Associates to anyone looking for great opportunities. Carolyn Floyd Tim was very patient & thorough!
  • Chris was amazing through the entire application and interview processes, 10 out of 10.

    He took his time to get to know me and really ensure that I was what he was looking for. He ensured that I had information about the hiring company to ensure it was something I felt I wanted to pursue. Chris also gave me some helpful tips and tricks in his emails about the interview process, you could tell that he was doing everything on his end to help you, it all just came down to how well you executed on your end. I would certainly recommend anyone looking for opportunities to reach out to Chris, the first possibility didn’t work out that we were attempting but he came back and nailed it with the second opportunity.
    Cody Smith
    Chris was amazing through the entire application and interview processes, 10 out of 10.
  • It was an amazing opportunity to work with David Hotovyy!

    David set me up with a great opportunity in my field as a restaurant General Manager. He really takes the time to get to know who you are and what you're about, what's important to you in your career and home life.   I would definitely recommend working with David,  and have actually passed on his contract info to several others already!
    Thank you David Hotovy & Patrice and Associates for helping me find something that is just right for me!
    Rebecca Jackson
    It was an amazing opportunity to work with David Hotovy!