Facing Rising Labor Costs, Restaurant Consider Raising Menu Prices

Almost two-thirds (64%) of restaurants said that they will increase menu prices in order to counter minimum wage increases due to new, local wage laws. That's according to a recent study conducted by 7shifts, a labor management platform for restaurants, of 1,000 restaurant managers, owners, and executives across North America.

Even though menu prices may increase, new food trends will bring new menu items, with 10% of participants who said that they’ll be focusing on vegan and plant-based options in 2020. 

The study includes the most important restaurant management trends, direct feedback from restaurateurs, and tips from 7shifts on how the industry can adapt to the change. eased a comprehensive study covering key insights and statistics about the state of the restaurant labor management industry and where it’s headed. 

Labor Low-Down

Among the key findings, 60% of restaurants saw their labor costs increase in 2019 and 50% of respondents expect their labor costs to rise in 2020 and beyond. 7shifts concludes that the statistics point to an industry-wide need for more educational resources and technology solutions to help reduce labor costs and employee turnover through staff engagement. A few other key statistics from the study below:

• The largest percentage of respondents (nearly 46%) said they would be investing in team building activities in 2020 in order to engage and retain employees, compared to other strategies like competitive pay and professional development that would potentially increase labor costs.
• 28% of survey participants said that high labor costs were their biggest restaurant challenge of 2019, with 33% of restaurant owner respondents predicting that high labor costs will remain their biggest hurdle in 2020.

The study also includes open-ended insights from respondents that give an inside look into how restaurateurs are thinking about the future of their business, and the restaurant industry, as a whole. “My advice for 2020: make sure to take into account the rising cost of living and minimum wage increase for tipped employees,” one survey participant noted.

The full study can be accessed here.