August 29, 2005
The Affect of Rising Gas Prices on the Foodservice Industry
As the cost of fuel continues to increase, the foodservice industry could start feeling the pinch from both the consumer and cost of operations perspectives.
San Francisco Oven, a Cleveland-based fast-casual concept has not felt the pinch at the pump from a customer perspective as of yet, said Eddie Cerino, executive chef and co-founder. And because most of the operator's business tends to come from a three to five mile radius around their stores, Cerino does not think San Francisco Oven will feel the pinch as much as other destination operators, those that draw clientele from a broader area.
That's not to say that Cerino and San Francisco Oven are not without their concerns. With stores in five states and additional units in development in several others, Cerino is concerned about rising corporate costs associated with doing business, including the cost of transporting food and travel expenses associated with visiting franchisees in the field.
"We are envisioning it as being a huge expense," Cerino said. "And it is going to get worse before it gets better."
Technomic, a research firm specializing in the foodservice industry, released the results of an overnight survey showing a significant percentage of consumers changing their restaurant spending habits due to rising gas prices.
According to Technomic, 18% of those surveyed said that they have reduced their spending at quick-serve restaurants due to higher fuel prices, while 19% have cut back spending at full-service operations.
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