, Columnist
At Olive Garden’s Parent, Wage Costs Crash the Party
A tight labor market is putting the squeeze on restaurant profits and creating a strong incentive for them to find ways to increase efficiencies.
The downside of a healthy job market.
Photographer: Daniel Acker/Bloomberg
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An upbeat U.S. economy has been good to the restaurant industry in many ways. Strong consumer sentiment has helped keep average checks growing, as diners shrug off price increases and splurge on bigger orders, and prevented industrywide traffic from falling off a cliff.
But the healthy economic environment comes with a downside for dining behemoths and their investors. Amid a tight job market, labor costs have become a notable drag on profitability.