Sponsored by Restaurant365
Accounting platform Restaurant365 conducts a quarterly in-app survey targeting fast-casual, quick-service, and fine-dining operators, including general managers and higher-ups, to collect valuable nationwide insights into the restaurant industry.
Eighty percent of respondents reported a rise in food costs, and to cope, 60 percent said they are increasing menu prices. “Operators are offsetting high costs by raising menu prices,” says Marc Cohen, solutions architect at Restaurant365. “It’s not sustainable in the long term. Raising menu prices can only go so far before it breaks consumer tolerance, and we’re already seeing it happen.”
For the first time in four years, Starbucks and McDonald’s have reported a 7 percent decline in sales compared to last year. For restaurant operators, this is a huge indicator of how rising menu prices affect consumer spending patterns.
“We’re seeing a bit of a ‘trade down’—where people spend money has shifted due to inflation and shrinkflation,” Cohen says. “Prices are going up, portions are going down, and the value proposition is fading.”
Value is crucial in quick service because it directly impacts customer loyalty and repeat business. If consumers feel they are not getting enough for their money, they will choose to eat elsewhere or reduce how often they visit.
“Restaurant365 helps control costs by providing transparency within organizations, allowing operators to see their food and labor costs in realtime,” Cohen says. “It’s also about managing orders and tracking waste—factors that affect your overall cost of goods. We’re very strong in this area.”
The Restaurant365 survey also found that 65 percent of respondents noted a rise in labor costs, with 89 percent reporting an increase of 1–5 percent. Thirty-four percent of respondents reported an average employee turnover rate of 11–25 percent and 35 percent plan on investing more in staff through better employee incentives.
“Finding the right people is key to the whole picture—guest engagement and maintaining a strong value proposition. R365 Hire is our hiring and applicant tracking solution, helping companies find and retain employees who align with their organizational culture. By having skilled and attentive staff who provide excellent service, operators can enhance guest experiences, making customers feel they are receiving more for their money, even when prices rise.
“A feature I like is the ability to set gates,” Cohen says. “Applicants must clear certain hurdles—like answering aptitude questions or meeting experience requirements—before their resume rises to the top. It filters out less-qualified candidates to get to the right people faster. By automating these processes, we can hire candidates before competitors who might not use a solution like this.”
To get customers through the door, Restaurant365 is also working on a marketing tool that connects with a table management system and a POS platform to gather guest data. It will compile guest information, track spending patterns, and allow operators to target customers via email and SMS. “The goal is to bring in more customers and increase sales,” Cohen says. “I believe that will be the biggest challenge over the next two quarters.”
Visit Restaurant365 to learn more about its comprehensive solutions.
By Olivia Schuster
