February 16, 2024
This month we look at: steak and lobster prices, where to find well-trained staff, tax prep, and national restaurant sales and inflation trends from January.
I hope you all had an incredibly busy Valentine's Day, or should I say Valentine's Week, as many diners are spreading their love beyond February 14th these days. The weekends before and after were more popular than the day of last year, so we're looking forward to seeing if this is a continuing trend or not!
And speaking of things we all love, the business tax deadline is coming up on March 15th for the United States. We've included a section in this month's edition on the basics (and we mean basics) of preparing for the big day.
Keep an eye out at the bottom of this month's edition for a new resources section, What We're Laughing At, because we can all use a few more lolz these days and you never know, it just may spark some creative ideas for your own content.
Lastly, I wanted to give a big thank you to those who submitted restaurant love letters last month. Reading your stories and brightening other restaurateurs' days by sending them is by far one of the best parts of my job. (We posted a few on our social channels for anyone curious!)
Know someone who would like to join our 60,122 subscribers? Forward to a friend or send them this link.
- Rachel & the MarginEdge team
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MONTHLY SALES METRICS & UPDATE
Fast Casual ended the month with +1% growth compared to January 2023's numbers and Full Service was not far behind with -2%. While January's numbers might look a little scary, it's important to check out the beginning of the chart for January 2023's sales which had impressive growth. So even with 1% and -2%, January 2024 is also 14% up for Fast Casual and 18% up for Full Service from January 2022's numbers.
The average food category costs as a percentage of sales increased slightly from last month for MarginEdge customers, with food costs averaging 30% of sales.
ITEM TO WATCH
Steak and Lobster
Is there any meal more quintessentially Valentine's Day than steak and lobster? Even Shakespeare said, "If surf and turf be the food of love, eat on," or something like that. This month we're taking a look at bone-in vs boneless ribeye steak median price per pound, and whole lobster vs lobster tail median price per pound.
For ribeyes, bone-in has a bit more price variability week over week and is consistently higher priced per pound than boneless. Costs for both have been steadily increasing since September of 2023. It was reported last year that droughts across key cattle-raising states like Kansas and Texas have decreased cattle populations to record lows. According to our data, this prediction was correct.
As for our crustacean comrades, costs also remain steady between whole lobster and lobster tail costs. While prices went into a steep decline in early summer 2023, according to our data, they've started to creep back up again. This week's median price per pound was already higher than 2023's highest price per pound by $0.26. Another summer drop could be in the cards as Maine lobster season kicks off around June, but only time will tell. 
As plant-based trends and consumer tastes continue to rise, animal protein costs may also follow suit. Seasonality typically plays a role in product prices, but the most common factor we've seen in price swings of late has been due to extreme weather. Seems like the person we should be wining and dining the most when it comes to keeping food prices steady is Mother Nature.
Where can I find well-trained staff?
Carrytown Cupcakes | Richmond, VA
ASK [me] ANYTHING
Where can I find well-trained staff?
Finding and keeping well-trained restaurant staff is top of mind for many in our community and four years into the pandemic, some operators may feel like they've exhausted all their usual ways to find good staff. The National Restaurant Association has recorded a steep slump in restaurant hiring over the last few months, but most signs are still pointing to growth in our labor market for 2024. Here are two ways to find well-trained restaurant staff outside of typical word-of-mouth/referrals and culinary school grads.
Culinary Training Programs - these organizations, like our friends at Emma's Torch, specialize in training and preparing refugees, asylum seekers, and survivors of human trafficking who are new to the U.S. for a career in the restaurant industry over an 11-week paid apprenticeship. Not only do they teach the basics for both back and front-of-house roles they also provide English classes, mock interviews and mock trials with actual restaurants. This kind of investment in their careers and ability to adjust to the American job market creates the foundation for life-long success in their roles.
If you operate a restaurant in New York City or Washington, D.C., and would be interested in helping Emma's Torch with doing mock interviews or trials or hiring some of their grads, you can find more info on that here!
Restaurant-Specific Job Marketplaces - job marketplaces can offer a multitude of solutions to staffing shortage problems. These digital job boards, like Poached Jobs, offer multiple options for finding staff such as listing open roles, hiring permanent positions or filling open shifts on an individual basis. While "contract workers" might not sound like a long-term solution to a staffing shortage, it's still a helpful way to access help when someone calls out last minute and no one else is answering their texts. And their candidates are vetted, so you can be sure you're getting someone who knows their way around a kitchen or floor.
💬 Ask [me] anything!
Really. Each month we’ll take a look at the questions we get and answer one here. Have a question about our product, accounting, or restaurant operations in general? 💌 Email me or message us on our social media channels.
Acropolis Greek Taverna | Tampa, FL
THE ECONOMY
Order Inflation Up (and holding)
The inflation report for January wasn't the greatest news, but it wasn't all bad either. Food away from home came in at 0.5% which is up from December's 0.3% increase, and overall food inflation rose 0.4%. Compared to last year, the index for food away from home is up 5.1% overall, which is less than December's YOY but not by much.
Limited Service meals still have the higher increase at 5.8% while Full Service meals came down slightly to 4.3% over the last 12 months.
The market certainly didn't celebrate the news, marking the largest one-day loss since March 2023. This will likely push the Fed's timeline for an interest rate cut back even further. Year over year, the overall index sits at 3.1%, which is less than December's YOY.
L'Opossum | Richmond, VA
'TIS THE SEASON
Tax preparation
The business tax deadline is coming up next month so there's no better time to talk about how to best prepare for this delightful little perk of being a restaurant owner. The first step is understanding what type of business your restaurant falls under according to the IRS, as that will determine what and when you need to file. This blog by TouchBistro gives a thorough overview of the basics for both the US and Canada.
You'll want to start by gathering all relevant documents (bank and credit card statements, receipts, invoices, payroll records, catering income, digital records from online sales, etc.) and categorizing them accordingly. Then you can look at deductions, special forms for partnerships and S-Corps, COGs and financial reports, asset depreciation, and tax credits and incentives.
Hopefully, you've already sent out W-2s to your full and part-time employees, but you should also keep in mind that payroll taxes also apply to any W-9 musicians, DJs, artists, freelancers or other independent W-9 contractors you've paid more than $600 during the year.
Tools like TurboTax can help you with filing a return yourself, but ultimately, the best way to prepare for tax season is to hire a certified CPA or bookkeeper who has an IRS Preparer Tax Identification Number (PTIN). Ideally, you'll want one familiar with the intricacies of restaurants that can help you with financial strategies (like maximizing deductions) all year long outside of tax season.
What's [me] into
😂 WHAT WE'RE LAUGHING AT
📖 WHAT WE'RE READING
🎧 PODCASTS WE'RE DIGGING
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