This month we look at: a deep dive into rising egg prices, holiday bonus structures, how to attract and retain good employees, inflation and national restaurant sales trends from November.

Greetings from the last month of the year! Whether it's your busiest season or you close up shop for a few days of well-earned rest, I hope December treats you well. 

If you're feeling deja vu over this month's item to watch, we can't blame you. Eggs were pretty pricey last month, once again. So was it seasonal holiday baking that led to the average price per dozen jumping up 44% from October? Scroll down to find out!

We also still have a few days left to give for our Giving Tuesday initiative with World Central Kitchen. MarginEdge has pledged to match 100% of employee donations and up to $5,000 of client donations. To those who have already donated, we cannot thank you enough. 

And on the topic of thank yous, I want to take a moment to thank our readers for their feedback and comments over the last year. I read every single message (I'm a real person, I swear!) and it means a lot when you share thoughts or questions about what we write about or what you want to read each month. Feedback is always welcome and I wouldn't be able to do this without you!

Wishing you all a very profitable December and I'll see you next year!

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- Rachel & the MarginEdge team

P.S. If you took our very, very accurate Restaurant Personality Type quiz, your December mantras are here!

MONTHLY SALES METRICS & UPDATE

Fast Casual had positive sales growth during the beginning of the month and over the Thanksgiving holiday, before ending at -9% compared to November 2023. Full Service also saw positive performance over Thanksgiving, before ending at -4% on a 7-day moving average. 

Food costs averaged 30% of sales last month, reflecting a slight drop from October's average.

Dig into the full report.

ITEM TO WATCH

Eggs

Egg prices have been a hot topic lately - and for good reason. The average price for a dozen eggs jumped up 44 percent for MarginEdge clients from October to November and may stay high for a while. Our long-time readers may remember that eggs were also our item to watch last December.

What's causing the jump this time? The short answer is bird flu impacting supply and demand. The long answer is a little more interesting and worth diving into as these price fluctuations will likely continue. 

Let's start with bird flu. Recent outbreaks in California, Washington, Oregon and Utah caused a reduction of 6 million laying birds. Anytime supply drops and demand holds steady - or in our current case, is increasing thanks to the holiday season - prices go up. It's basic economics, nothing fancy. But those birds only account for roughly 1.6 percent of the total US laying flock, so why are low prices flying the coop?

CA, WA, and OR (along with Nevada, Arizona, and Massachusetts), all have laws that require all eggs produced and sold in these states to be cage-free. Colorado, Michigan, Rhode Island and Utah have cage-free production or sale laws soon going into effect too.

Due to these laws, CA, WA and UT are some of the largest cage-free egg producers in the US, so when their supply drops and you can only sell cage-free eggs, other out-of-state cage-free producers have to pick up the slack. In March 2024, cage-free layers were reported to be about 40 percent of the U.S. flock and are projected to account for 51% of all eggs produced in the US by 2026.

To make things even more precarious, bird flu is often spread by contact with wild, migratory birds, meaning free-range, cage-free laying hens have a higher chance of exposure because they spend their lives outdoors. As shown in the chart below, egg prices in the West (where most cage-free states are) are higher than the national average by about $1, but the entire country has been impacted. 

While it may go against popular rhetoric about who controls egg prices, the real culprit is bird flu outbreaks, and we can likely expect further periods of price increases if and when more occur.

Acropolis Greek Taverna | Tampa, FL

ASK [me] ANYTHING

How can I attract and retain good employees? 

Finding and (more importantly) keeping good employees has long been a struggle for restaurant operators, and things like changes to the broader labor market, inflation and minimum wage increases have only made things more difficult in the past few years. While the total number of food service jobs has surpassed the pre-pandemic peak, growth has slowed in 2024 and is on pace to add only about half  the number of jobs added in 2023.

So, what can you do to stand out to top talent and how can you make them stay? The answer may lie in a two-birds-with-one-stone approach. According to a 2024 survey by Toast, the two biggest reasons for working in food service were schedule flexibility (46%) and good hourly pay (36%). On the flip side, the two biggest pain points were poor hourly pay (32%) and having a difficult manager (32%).

While a little obvious, it's not coincidental that solving either pain point would make the reasons for working in food service even more attractive to employees. With that in mind, here are 4 things to consider when it comes to attracting and retaining top restaurant talent: 

Benefits

Medical benefits were reported as the most valuable benefit for both 2023 and 2024, but the percentage of respondents who ranked it #1 increased in 2024 to 33%. Other important benefits were PTO and free meals. While an expensive chunk of overhead costs, it's clear that medical benefits are significant to food service employees, and offering them can improve retention. 

PTO was fifth most valued in 2023 and jumped up 10% to the second spot this year showing a clear shift in importance. This also aligns with the number one reason why employees work in food service, flexibility.

Flexibility 

There's always a delicate and sometimes impossible balance between keeping employees happy with their schedules and still being able to run a tight and profitable shift. One of the best ways to do both is to streamline your scheduling processes and how your team communicates schedule changes with each other. For example, 7shifts lets your team submit their availability and even request shift trades in their app. 

This is great for your hourly employees and makes your managers' lives easier while creating the schedules. And speaking of managers...

Culture

Having a bad manager came in tied for the biggest pain point food service employees have about working in our industry, and having difficult coworkers was not far behind in fourth place. Company culture is important, both as a way to attract top talent and also to keep them. Open communication, fostering trust between management and staff and showing appreciation are all ways to improve culture. 

We know no one wants to be told their crap stinks, but welcoming and listening to feedback is just the start. Taking feedback seriously and making positive changes where you can, can go a long way in making your teams happier to be (and stay!) at work.

Pay

Good hourly pay was the second most common reason why respondents worked where they worked at 36%, and poor hourly pay was their biggest pain point about this industry. We doubt this information is news to anyone, but how do tips fit in? Making good tips was less so, but still important compared to making a good hourly pay, coming in as the fourth highest reason for working where they work.

When it comes to tips, tip pooling is not very popular, with 46% of respondents saying they don't like it. Receiving daily tips is, however, with 56% preferring that over other time intervals.

While not every topic on this list may be feasible for every business, the key thing to keep in mind is that most improvements that attract good talent will also help retain them long-term.