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Proactively manage increasing product costs

Q: I know product costs are going to continue increasing. What are the realities we’re facing in 2013?

A: The summer of 2012 brought a severe drought throughout the mid-west and much of the United States. Though some prices have increased, substantial price increases will hit in 2013 according to the USDA Economic Research Service (http://www.ers.usda.gov/data-products/food-price-outlook/summary-findings.aspx). 

Increases are expected to be 3.0 to 4.0 percent. This cost increase is another $8,400 per $1 million in sales with an 80 percent food sales mix and a 30 percent food cost. Beverage pricing will continue to feel pressure as well. Implement these recommendations to avoid falling victim to inflation pressure:

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Proactively manage increasing product costs

Q: I know product costs are going to continue increasing. What are the realities we’re facing in 2013?

A:
The summer of 2012 brought a severe drought throughout the mid-west and much of the United States. Though some prices have increased, substantial price increases will hit in 2013 according to the USDA Economic Research Service (http://www.ers.usda.gov/data-products/food-price-outlook/summary-findings.aspx).

Increases are expected to be 3.0 to 4.0 percent. This cost increase is another $8,400 per $1 million in sales with 80 percent food sales mix and a 30 percent food cost. Beverage pricing will continue to feel pressure as well. Implement these recommendations to avoid falling victim to inflation pressure:

Click here to read more »

Proactively Manage Minimum Wage Increases

Q: Minimum wage is set to increase again. I feel the squeeze of financial obligations already, how can I overcome another increase in expenses without any foreseeable benefit?
A: Washington State boasts the highest minimum wage in the nation and because of a voter approved measure is one of only 10 States where minimum wage can increase annually based on the federal Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). As a result, minimum wage will normally increase each year. Over the last five years Washington State’s minimum wage has increased nearly $1.00 per hour and approximately $0.50 in the last two years [Exhibit 1]. Effective January 1, 2013 minimum wage will once again increase to, gulp, $9.19. Click here to read more »

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