The restaurant industry has taken quite a beating over the past several years as cost-conscious, recession-weary consumers pulled back on dining out. Now, after regaining some steam as the economy improves, restaurateurs face another challenge, this time from Mother Nature.
Scorching temperatures and scarce rain have scarred the plains, damaging crops and driving up prices for everything from soy beans to corn. Increases are gaining speed, with prices on track to jump 3 percent this year on top of a more than 8 percent uptick last year.
Not surprisingly, food costs rank as the second biggest challenge for restaurateurs, according to the National Restaurant Association, primarily because roughly one third of the typical restaurant sales dollar is allocated toward food and beverage purchases.
Drought-driven food price increases are already starting to trickle down to restaurant buyers, who are seeing revised reports for prices and availability.
Read more on the US News website: http://www.usnews.com/news/articles/2012/08/06/restaurants-resist-price-hikes-to-keep-cost-conscious-consumers-loyal