Feb. 3, 2022 "Coffee shops are raising prices as beans become more costly, workers demand higher wages": Today I found this article by Archie Hunter on the Financial Post:
From Seoul to Seattle, the soaring cost of coffee beans is making its way into the cups of consumers.
Some of the world’s biggest roasters and sellers of coffee are upping menu prices, having flagged that customers would be paying more as bean prices began to surge last year.
Workers demanding higher wages and other costs have also added to the rising charge for a daily cup, which is in turn contributing to inflation pressures felt through much of the global economy.
Futures for arabica coffee, the type used by Starbucks Corp. and other sellers, jumped 76 per cent in 2021, hitting decade highs after droughts and once-in-a-generation frosts severely damaged crops in Brazil, the world’s top producer. Most-active futures this year are up more than 5 per cent. Big roasters will generally buy inventory months or years in advance, meaning a further price onslaught could be in store.
In the U.K., Pret A Manger said Wednesday that it was hiking the price of its monthly subscription from 20 pounds to 25 pounds as a result of inflationary pressures. Customers receive up to five coffees a day through the program.
That comes after Pano Christou, Pret A Manger’s chief executive officer, told Bloomberg in an interview that the cost of the sourced arabica coffee beans that make up the bulk of its blends has risen 40 per cent since 2020.
Starbucks plans to continue raising menu prices again this year, after doing so in October and January, CEO Kevin Johnson told investors on an earnings call Tuesday.
That follows South Korea’s Tom N Toms, which said last week it would be increasing the retail cost of a cappuccinos, lattes and Americanos by 300 won ($0.25), citing the higher price of beans.
Coffee shop chains are raising prices as workers demand higher wages | Financial Post
They are already selling something that costs all of 10 cents to make for way to much money. Will they keep lining up for it?? ;-) they should be able to automate the process of brewing , filling and serving a cup of coffee - that would solve a lot of problems.
My opinion: This reminds me from a joke on Jay Leno: "When Starbucks raises their coffee from $5 to $5.05, people learn that coffee is something you can easily make at home."
I know at Starbucks, they put milk and whip cream, etc. in there. However, I put milk, hot chocolate powder in my coffee.
You can buy Tim Horton's coffee grounds from their coffee shop and make this at home.
Oct. 23, 2023 "Restaurant owners worried about menu inflation, report finds": Today I found this article by BNN Bloomberg:
Restaurants in Canada are dealing with a crippling shortage of workers, according to a new industry report, and the food service industry is suffering as a result.
Restaurants Canada, a non-profit association that represents restaurants across the country, released its annual Foodservice Facts report on Monday, which examines the current state of the food service industry.
LABOUR SHORTAGE
One of the main concerns flagged in the report is a chronic labour shortage. The report claims that total employment at restaurants remains 173,700 jobs below 2019 levels.
Vacancies in 2022 were “double” pre-pandemic levels, with an average of 135,000 job vacancies that year, the report said.
“Restaurants have the highest job vacancy rates of any industry, accounting for one of every six private-sector job vacancies in Canada,” the report said.
The report cited declining participation of 15 to 24-year-olds in the industry as a main reason for current shortages, noting that many young people are postponing entering the work force to focus on post-secondary education.
The report also said that the shortage of labour has disproportionately affected the food service industry, as significantly more employees are required to run a restaurant than other businesses such as grocery or retail stores.
Diners have also been directly affected by the shortage in recent years. The report cited an Angus Reid survey conducted in May of this year that found nearly 40 per cent of Canadians said they wait longer for food at restaurants than they did before the pandemic.
“Looking at the statistics, we can safely say this is due in large part to labour shortages,” the report read.
MENU PRICES UP
Another factor affecting restaurant profitability post-pandemic is the rising cost of food and supplies, which has led to higher menu prices nation-wide, according to the report.
Menu inflation has fallen significantly since reaching a record-high of 8.2 per cent in January, the report said. But overall, menu prices are still expected to rise this year by more than five per cent compared to 2022.
Restaurant owners, meanwhile, are wary about how much of their financial burden they can reasonably pass on to their customers, according to the report.
“Many restaurant owners have stated that they can’t continue to raise menu prices or they will lose customers,” the report said, “which is especially true given the current financial situation of households.”
HIGHER SALES, LOWER PROFIT
The report also found that despite nominal sales in the food service industry reaching a record-high $100 billion in 2022, 51 per cent of restaurant owners are either currently operating at a loss, or just breaking even.
Before the pandemic, only seven per cent of owners operated at a loss, and five per cent broke even, according to the report, while 36 per cent earned a pre-tax profit of 10 per cent or more.
Today, just 12 per cent of restaurants see double-digit profit margins, the report said.
“While sales have improved, operators are unable to be profitable due to soaring operating costs and customer traffic that remains stuck below pre-pandemic levels,” the report read.
“All of this highlights that, while most of the economy has moved on from the pandemic, the food service industry has a long way to go.”
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