Another situation that can easily be attributed to the pandemic that has been going on for over two years is inflation. As consumers, we have all noticed a significant increase in prices. For restaurateurs, the consequences are just as visible. How do they manage this new challenge?
Normally, annual inflation is around 2%. But since COVID, the annual rate is closer to 5 or 6%. The difference is enormous!
This difference is striking in the price of food that restaurant owners have to buy. They have seen their bills increase by almost 20% in the past few months alone. In fact, the change is felt every week at most suppliers.
But that's not all. In addition to dealing with this increase for food, restaurant owners also have to shell out several extra dollars for other products, like packaging.
For this reason, restaurateurs are trying to vary their sources of supply. They can afford to "store around" for prices. But only when possible, because the supply is smaller than it used to be.
And that's without taking into account the labour shortage, which adds to the payroll expenses.
Customers are footing the bill too
Restaurateurs have no choice. As you may have noticed, they too have raised the price on their menus. In fact, according to a survey by HRI Mag and the Association Restauration Québec, 83% of restaurant owners surveyed are considering doing so.
In some cases, the increase is significant, but in most cases, managers are doing it gradually to minimize the impact on their customers.
If they don't, their financial health is at stake and their survival is threatened. Given the slim profit margin in the restaurant business, decision-makers cannot let go and gamble with that margin.
Fortunately, according to some economists, inflation may return to a normal rate during 2023.
Will that be enough to bring prices down for consumers this time?
