Find out how labor costs are influencing QSR menu prices

With up to 30% of total revenues being spent on staffing, operators are being forced to raise their menu prices to offset increasing labor costs.

When a QSR comes out with a more expensive menu board, it is likely a response to climbing labor costs. Nearly 3 out of 4 (74%) of QSR operators reported increasing menu prices to offset labor costs, according to an Oracle survey.

QSRs instinctively jack up prices in order to cope with the new labor cost reality: Between 25 to 30% of total revenues are spent on staffing.

"The cost of labor is one of the most significant factors in a restaurant business, and consequently, its variation can have a rippling affect across all operations,” says Christopher Adams, VP of Sales, Food & Beverage APAC at Oracle Hospitality. “Which explains why controlling it is of paramount importance.”

Adams reckons QSRs can do a better job in curbing labor cost by leveraging technology.

For example, QSRs can use labor management tools which are powered by the cloud that allow managers to project the required labor for the week based on expected sales volumes using forecasting and historical data. Managers get to control overtime costs as well through scheduling systems that keep tabs on employee hours per shift.

In addition, scheduling systems can also help the manager handle the tricky business of preferred and unwanted shifts, and allow employees to easily trade shifts. This flexibility can be a great boon for employees, and make them less likely to leave, saving QSRs the hassle and extra costs of hiring and retraining new staff.

Other cloud-based tools drive down the overhead labor costs by allowing centralised staff onboarding and enabling real-time collaboration among staff.

"Technology helps corral labor cost in various ways - - with tools that build efficient scheduling, track staff hours and retain employees,” says Adams.

Download the full Oracle report: Cost Control in Food & Beverage