As the American labor market remains tight, major restaurant chains identify staffing challenges as a threat to their businesses.
The United States economy currently has 2.8 million more available jobs than workers willing to take them — a reality that permits workers to be choosy with the positions that they accept.
As CNBC summarized, the chief executives of major restaurant chains noted the state of the labor market in recent earnings calls:
Restaurant executives have painted a bleak picture of staffing challenges to investors on their earnings calls in the last two weeks. CEOs like Domino’s Pizza’s Ritch Allison, Chipotle Mexican Grill’s Brian Niccol and McDonald’s Chris Kempczinski shared details on how eateries have shortened hours, restricted ordering methods and lost out on sales because they can’t find enough workers. Some chains have been hit harder by the labor crunch, like Restaurant Brands International’s Popeyes, which saw about 40% of its dining rooms closed due to understaffing.
As a result, firms have resorted to raising prices for customers and boosting wages to attract workers:
Raising wages is one popular approach to staffing problems, although it isn’t a perfect solution. McDonald’s wages at its franchised restaurants have risen roughly 10% so far this year as part of an effort to attract workers. Higher labor costs have led to increased menu prices, which are up about 6% from a year ago, according to McDonald’s executives.
Starbucks plans to spend roughly $1 billion in fiscal 2021 and 2022 on improving benefits for its baristas, including two planned wage hikes. The decision reduced its earnings forecast for fiscal 2022, disappointing investors and shaving off $8 billion in market cap.
The Daily Wire previously reported that McDonald’s is partnering with IBM to automate drive-thrus; as early as June, executives foresee the technology appearing across the United States.
“There is a big leap between going from 10 restaurants in Chicago to 14,000 restaurants across the U.S. with an infinite number of promo permutations, menu permutations, dialect permutations, weather — I mean, on and on and on and on,” said McDonald’s CEO Chris Kempczinski. “Do I think in five years from now you’re going to see a voice in the drive-thru? I do, but I don’t think that this is going to be something that happens in the next year or so.”
Nearly one-fifth of economists recently surveyed by The Wall Street Journal identified labor shortages as the primary threat to economic growth. Other economists mentioned pervasive supply chain bottlenecks limiting access to many consumer goods.
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Source: Dailywire
