The Great Recession had lasting effects, including long-term joblessness and declining business dynamism. Enterprise suffered, as well, with many businesses going under. Others have managed to make it through, albeit it by switching strategies. In the restaurant industry, a drastically different set of obstacles emerged, including new labor rules and high food prices.
Though people still love fast food, fast-casual eateries and formal restaurants were hit fairly hard by the evolving state of the market. Many restaurants simply weren’t able to absorb the costs without switching gears. Certain fast food restaurants bumped up prices over the past few years, for example. But if they cranked the dial too much, consumers would just find another place to eat. And the cutthroat world of food offers consumers alternatives almost everywhere they look.
For these restaurants, the struggle continues. And unless they can find ways to cope with rising labor and food prices while also retaining their customer base, they’re cooked.
- The Dollar Menu officially died back in 2015.
For all of McDonald’s strengths, it has one big weakness. When you base your business on selling beef at a very low price, any fluctuations in food prices (meat in particular) are going to have a big impact. The chain’s famous Dollar Menu has disappeared at many locations, and franchisees have largely had to institute big changes in order to keep customers coming in. McDonald’s is also facing competition from companies, such as Chipotle and Panera Bread, both of which offer a better dining experience at a similar — albeit slightly inflated — price.
Next: If ribs are more of your thing, the bad news is they aren’t getting any cheaper either.