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Restaurant Industry Earnings and Pricing Talk to Inflation's Influence

Wage Increases and Service Fees

The restaurant industry has seen a significant increase in wages and service fees since the onset of the COVID-19 pandemic. The 410 average hourly earnings increase for restaurant workers compared to the same period in 2022 is a testament to this wage growth. In the second quarter of 2024, approximately 37% of restaurant transactions included a service fee, which is double the number from the beginning of 2022.

Labor Costs and Inflation

These labor cost increases have put a financial burden on restaurants, as they have been rising steadily since April 2021. As a result, higher wages and inflation have had a significant impact on restaurant expenses. On average, wages have grown faster than prices since the pandemic's onset, particularly in the low-wage sector.

Consumers' Resilience

Despite the economic challenges, consumers have not completely abandoned dining out. They are adapting to the higher restaurant costs and service fees. This indicates that the economy is still being affected by inflation, but not to the extent that consumers are pulling back on their spending.