As the labor market in the United States continued to remain strained, quite a few chain restaurants have stated that staffing challenges are the main threat to keeping their doors open.
Currently, the United States economy sports 2.8 million more job openings than there are workers that are willing to work them which leads to the result that allows workers to be extra choosy in regards to any positions they would be willing to accept and work.
As stated by CNBC, the chief executives of major restaurant chains spoke about the state of the labor market in a recent series of earning 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.
In response to this, Firms have ended up resorting to increasing their prices for customers in order to increase 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.
As reported by The Daily Wire, McDonalds is planning on partnering up with IBM in order to create and set in place Automated Drive-thrus. They are seeking to put these into use as early as June, the executives foresee that the technology will soon be appearing all over 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,” stated Chris Kempczinski, the CEO of McDonald’s. “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.”
In a survey put forth by The Wall Street Journal, almost 1/5th of economists identified that labor shortages as the primary threat to sustainable economic growth. However, others seem to blame the intense supply chain bottlenecks that are limiting access to many consumer goods.