High Costs Force Chains to Adapt

High costs for everything from ingredients and fuel to packaging have been taking their toll on major U.S. restaurant chains like Wendy’s, Jack in the Box and Papa John’s. Compounding the problem is the fact that chains are hesitant to raise menu-item prices to help offset losses, citing concerns about potentially losing business to chains with less-expensive fare.

Second-quarter costs for Wendy's were up about $11 million compared to last year. Arby’s is in the process of acquiring Wendy’s for around $2 billion. Third-quarter profit at Jack in the Box fell about 13%. However, Papa John’s saw about a 9% rise in second-quarter profit due to increased sales and new restaurant openings.

Source: Reuters
“Commodity Costs Weigh on U.S. Restaurant Results”