Consumers often notice overall inflation and cost-of-living increases when the price of one particular, favorite item rises. In the restaurant industry, these indicators similarly can appear in niche products or menu favorites, and in the face of inflation, it was especially noticeable in the increased cost of chicken wings in 2022. “During the pandemic, both wholesale and retail costs of chicken wings soared as demand skyrocketed when consumers were eating more comfort food delivery and takeout,” writes Nation’s Restaurant News (NRN) in this recent article.
But the article is good news and goes on to say, “wholesale costs of wings are down 39% from a $4.10 high in the week leading up to the Super Bowl in 2022, according to Q4 2022 data collected by digital restaurants platform, Toast.”
That’s a significant decrease on a specialized food item that often consumers are buying in bulk quantities. And the lowered cost is good news for consumers and restaurants everywhere, even those without chicken wings on their orders or menus. The NRN article suggests the “pricing ease of chicken wings is also in line with what experts predicted for commodity costs in 2023, with chicken, eggs, and dairy prices expected to come down a little bit,” according to David Maloni, supply chain expert at Datum FS.
While the economy ebbs and flows and prices rise and fall, these significant drops in pricing—after steep climbs—are still connected to pandemic-related adjustments and supply chain issues. Though most consumers have moved on from a pandemic mindset, the market—and specifically restaurants—are still recovering from its domino effect. “Menu pricing inflation goes hand-in-hand with commodities and labor costs inflation,” states the NRN article.
Consumers are certainly aware of the cost increases in their daily needs and spending habits. But fortunately for restaurant workers, other pandemic-era habits remain in place, including increased gratuity. “According to Toast, during the fourth quarter of 2022, 48% of transactions at quick-service restaurants included a tip, which is up 11% since Q1 2020.”
Even three years later, the restaurant industry is dealing with the fallout of a pandemic and the then related lockdowns, but experts are also monitoring which consumer shifts were pandemic trends and which might stick around. Much like the convenience of digital interaction seems to be here to stay, it seems that the patron-worker interactions are permanently altered, and consumers are conscientiously participating in a more symbiotic relationship. This means, particularly for Gen Z and Millennial clients who value ethical business practices and fair labor in restaurants they frequent, they’re putting their money where their ideals are, and they are tipping the workers generously.
Much like inflation cost increases, and those items which are hopefully decreasing in price, these shifts in consumer behavior impact the ways in which restaurant owner-operators are building menus and supporting their staffs.
Richard Weil, owner and principal of National Restaurant Consultants believes, “As we enter the second quarter of 2023, we (along with many economists) project that the prolonged effects of the supply chain will continue through the third quarter. Operators must continue to be mindful of their top 25-35 purchased items and make adjustments to their menu pricing and overall menu layouts.”
Whether your restaurant project is still recovering from the pandemic or starting out fresh, our restaurant consultants are experts in evaluating your pricing, menu engineering and staff development. These business plan items are key to your restaurant’s success in the current market and beyond.