New SpotOn Report Reveals Effects of Inflation on Restaurants in America
SAN FRANCISCO–(BUSINESS WIRE)–SpotOn,(spoton.com), one of the fastest growing software and payment companies providing comprehensive solutions for restaurants, retail stores and entertainment venues, today released the findings of an internal study on the impact of inflation on restaurants across the country. This is the first time that the company has released information and data analysis as an economic indicator. The high-level report shows notable increases on popular menu items and reveals unexpected trends like increased tipping.
Despite economic factors driving up order prices, SpotOn found that Americans are tipping more. Over the course of six months (from October 2021 to April 2022), SpotOn found that the average price of an order increased by 7%, while the average tip increased by an impressive 9%. This corresponds to the recent Consumer price index report that shows full-service dining grew 8.7% and takeout grew 7.2% over the past 12 months. This is the largest 12-month increase since the index’s inception in 1997 according to the US Bureau of Labor Statistics. Economists say the trend of higher tips correlates with diners having pent-up savings thanks to the pandemic.
Inflation throughout the supply chain has driven up food costs for restaurateurs. Industry suppliers like Tyson saw their average selling prices for the last fiscal quarter increase nearly 20% from a year earlier. the Producer price index found that food prices rose 12.8% year over year: 22% for grains, 36.4% for cooking oils and a whopping 43.9% for beef and pork. calf. These spikes forced restaurants to adjust prices across the board.
“Pricing is a challenge right now because inflation rates have gone up,” said Chuck Conrose of Tony’s NY Pizza in Fort Meyers, Florida. “Prices have gone up, so we need to offset that by raising our prices for our customers. It’s not something I like to do, but we need to pass on those costs so we can all make money and stay in business.
An analysis of SpotOn data shows that groceries saw an average 6% increase in cost to customers (average entry now costs $19.50 including tax). While some increases are expected, such as avocado’s 4% increase, in line with previous trends, others have surprised industry veterans. The report reveals that there was a 7% increase in the price of pizza and a 5% increase in coke and diet coke. Fries were spared a raise, giving customers the freedom to steal them from other diners’ plates. Wine and soft drinks increased by 6% and 8% respectively. Cocktails and beer have remained remarkably flat, but some economists predict the increases are not far off.
The largest increase in average price occurred in seafood restaurants (+19%) due to the cost of each daily catch. Shellfish lovers saw an 8% increase in lobster, an 11% increase in crab and a 14% increase in shrimp. While fans of Mexican cuisine will note a 10.5% increase in tacos.
Menu Report Highlights:
Pizzas: 7% increase
Tacos: 10.5% increase
Avocado: 4% increase
Wine: 6% increase
Coke / Diet Coke: 5% increase
Shrimp: 14% increase
Lobster: 8% increase
Crab: 11% increase
“The fluctuating market will continue to present challenges in maintaining a healthy profit margin for restaurants,” said Kevin Bryla, chief customer experience officer for SpotOn. “We are actively working alongside our restaurant customers to ensure they have the technology they need to reduce costs, maximize their workforce, optimize operational efficiencies and generate revenue, so they can increase their profit margins, point by point.”
SpotOn tracks industry data and trends to better support its thousands of restaurant customers across the United States. Real-time data and insights help small and medium-sized operators make smart decisions to control costs and generate revenue. SpotOn also provides easy-to-use tools, like its restaurant profit margin calculatorto help clients leverage technology to increase their profits, as well as quick and easy loans through SpotOn Capital so they can make smart investments in growing their business.
SpotOn is one of the fastest growing software and payment companies with comprehensive cloud-based technology for businesses of all types and sizes. Known for its rapid innovation and personalized support, SpotOn offers an end-to-end software and payment platform to streamline operations, improve customer experience and increase profits. From transparent and efficient POS systems to integrated management solutions designed for the fast-growing business, SpotOn develops technology that “works as you work” and backs it up with a team of experts 24/7. who make sure she always does—with fairness, flexibility, and a personal touch. SpotOn has 2,000 employees, including one of the strongest product and technology teams in the combined software and payments industry. For more information, visit spoton.com.