This month we look at: orange costs, the latest inflation updates, how to know the right time to open up a commissary kitchen and national restaurant sales trends from August.
We consider ourselves an optimistic bunch here, and based on some “recession revisionists” at the Federal Reserve, looks like we aren’t heading into arecessionafter all, good news! Inflation is still a concern of course, but the gloomy recessionary clouds have cleared out at least for now.
Our item to watch is not bacon this month, but we did want to point outbacon priceshave shot up recently. Record high pork belly prices have been reported and recent regulation changes have also made an impact on farmers' costs.
Quick Favor: we’ll be (dumpster) diving next month into the topic of food waste, if anyone has any creative ideas for making the most of their inventories let us know. Need some inspiration? Check out this previous newsletter’sAsk [me] Anythingsection where 1.6% savings of food costs was realized.
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- Tracy & the MarginEdge team
MONTHLY SALES METRICS & UPDATE
Fast Casual beat out Full Service once again, with sales ending equal to August 2022's numbers and Full Service ended just south of neutral at -2%. Full Service's very positive trajectory during the last half of the month is definitely encouraging as we head into the end of the year.
Across the nation, sales ended up slightly below July's final numbers, with the Northeast fairing the best.
A tall glass of OJ is a beacon of sunshine for many on the breakfast table and a staple mixer for brunch beverages. We’re taking a look at oranges this month as Florida has been battered by multiple hurricanes over the last year. To make matters worse, a disease called citrus greening has caused Florida citrus production to drop 60%compared to last year. California has picked up production but the overall numbers look pretty abysmal, levels not seen since 1936. Based on our data, we have not seen any significant week-over-week (WoW) increases for either oranges or orange juice thus far
Since August, OJ is up 58 cents per gallon overall. If the breakfast special includes a glass of fresh-squeezed orange juice or you’re offering bottomless mimosas you may want to keep an eye on prices over the next few months.
Clyde's | Washington, D.C.
ASK [me] ANYTHING
How do I know when I'm ready for a commissary kitchen?
This is a common question for operators in expansion mode. Commissaries and shared central kitchens have always been advantageous for single-concept restaurant groups. Due to increased off-premises dining and rising labor costs, commissaries are becoming more and more advantageous for independent restaurant owners. Commissaries consolidate costs using the same assets and overhead sources to cover multiple restaurant locations, but they also create an accounting and invoicing nightmare. The Fork CPAs outline when a commissary is beneficial and two of the most common and straightforward methods of invoicing and accounting for food and labor costs in this model. If you want to automate most of this process to cut costs further, check out the MarginEdge commissary module.
Ask [me] anything! Really. Each month we’ll take a look at the questions we get and answer one here. Have a question about our product, accounting or restaurant operations in general? Email me or message us on our social media channels.
Bento | multiple locations
Order Inflation Up (again)
You probably noticed it at the pump so it's likely not news to you – the overall 0.3% increase in August’s Consumer Price Index (CPI) compared to July was mostly due to gas prices. The index for food away from home rose 6.5% over the last year while food at home (aka groceries) is up 3%. Breaking it down a bit more, limited service meals rose 6.7% over the last 12 months, and the index for full service meals rose 5.2% over the same period.
Despite the uptick, consumers are still feeling pretty good about pulling out their wallets. Americans’ expectation of inflation was 3.1%, the lowest since March of 2021. Last month’s PYMNTS survey indicates even financially-strapped consumers prioritize dining out when deciding when to splurge. We’ll take it!
Happy hour can indeed be happy without alcohol. Lists of the best bars offering booze-free options are popping up across the country. From Los Angeles to New York, it’s clear more consumers are seeking more sophisticated alcohol-free options. Restaurants are stepping up and offering mocktail options like Beatrix’s Attitude Adjustment, a zero-proof cocktail made with non-alcoholic gin, fresh lime juice, pomegranate soda and ginger. With Sober October right around the corner, there’s opportunity for profiting from the movement.
Offer some amazing mocktails? Tag us @marginedge.
What's [me] into
📖 WHAT WE'RE READING
Best New Restaurants 2023 - With several former chefs as part of the [me] team, Best New restaurant lists are always piquing interest in the chat (especially when we see some of our clients).
Drone Delivery - You’ve heard about drone delivery from Amazon and Walmart, the latest tech offers food from your neighborhood restaurants piloting in four cities across the country.
🎧 PODCASTS WE'RE DIGGING
Full Comp - Michelin-rated restaurateur Josh Kopel, invites hospitality professionals and thought leaders from outside the industry to offer a new perspective on an old business.
The Digital Restaurant - Sometimes a shorter podcast works for your drive/workout/downtime. Get an overview of top restaurant news stories in less than 20 minutes.