Inflation causes restaurant owner to charge nearly $16 for sandwich, calls jump in prices ‘incredible’ | FOX Business
Inflation, the persistent rise in the prices of goods and services, is affecting businesses in various industries, and one restaurant owner’s experience sheds light on the challenges they face. Brian Will, the CEO of Will Restaurants Investment Group, recently revealed that he now charges nearly $16 for a BLT sandwich, up from $12.99 just three years ago. This dramatic price increase is driven by the need to cover operational expenses, and it highlights the intricate dynamics of running a restaurant business.
Will explained that while the wholesale cost of the BLT sandwich is only $5, he faces significant monthly expenses. Renting a space in a “new mixed-use development” costs him $20,000 a month, and his monthly utilities amount to $6,000. Labor costs in December reached $60,000, making his base expenses a staggering $86,000 as soon as the restaurant doors open in January.
When you factor in a 32% food cost, Will’s gross profit for each sandwich is only $11. This means he must sell approximately 93,000 sandwiches just to break even before making any profit. These insights highlight the complex financial calculations involved in running a restaurant, where rising costs can significantly impact menu prices.
Will’s experience also underscores how businesses are affected by broader economic factors. He signed a lease for his restaurant location before the COVID-19 pandemic, with fixed annual rent increases. With the changing economic landscape, including rising interest rates and shifts in consumer behavior due to remote work, he faces the challenge of adapting to a different economic reality……….
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Rising Dough
The impact of inflation on industries like restaurants can be profound. How do rising costs, driven by inflation and economic shifts, affect the decisions made by business owners like Brian Will? How might these cost pressures impact investors and shareholders in the restaurant industry? And how do consumers respond to increasing menu prices? Reflect on the delicate balance between profitability and affordability in the face of inflation’s challenges within the business world.
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