Fast Food Crisis: Rising Costs and Ways Out of the Crisis

The fast food industry is in a deep crisis. Rising raw material prices, high energy costs, and staff shortages are putting fast food restaurants under massive pressure. While the prices of ingredients like meat, cheese, and vegetables are rising, many businesses have limited ability to pass these costs on to their customers – because excessively high prices could deter customers. In this article, you'll not only learn about the two main problems of the fast food crisis , but also what fast food restaurant owners can do to remain successful in the long term.

The biggest challenges for fast food restaurants

Rising meat prices

A key factor in the current tense situation is the rising cost of beef and veal. Prices have risen dramatically over the past three years, directly impacting popular fast food products like burgers and kebabs. The reasons for these price increases are manifold:

• Closure of many cattle farms – less supply leads to higher prices.
• Climate protection and animal welfare requirements – new regulations make cheap meat production more difficult.
• Increased producer prices – Agriculture has been suffering from price fluctuations and economic uncertainty for some time.

Recommendation 💡
An expanded range of chicken, vegetarian, and vegan dishes can help reduce costs while attracting new target audiences. Furthermore, increased prices for dishes are more likely to be met with understanding the better the reasons for price increases are communicated to customers.

High fixed costs for energy, rent and personnel

In addition to raw material prices, fixed costs for fast food establishments are also rising, not least due to current inflation:

• Energy costs : Kitchen appliances, cold storage, and lighting are driving up electricity consumption, while many restaurants are struggling with the aftermath of the energy crisis.
• Rental costs : Especially in large cities, rents for restaurant spaces have continued to rise in recent years.
• Staff shortages and wages : The staff shortage is forcing many restaurants to pay higher wages while at the same time desperately looking for employees.

Recommendation 💡
Increased efficiency in the kitchen : Energy-saving appliances and optimized processes help reduce costs. Automation : Self-ordering terminals and digital ordering systems reduce personnel costs. More compact locations : Smaller branches or ghost kitchens (pure delivery kitchens) save on rental costs.

Ways out of the crisis: What can fast food restaurants do?

Alternative ingredients & more flexible menus

• Chicken, vegetarian and vegan dishes should be offered as comprehensive, cheaper alternatives to expensive beef.
• Regional and seasonal products should be used to reduce costs – menus can be adapted seasonally to suit the available ingredients.
  

Sustainable packaging & reusable systems

• Environmentally friendly fast food packaging reduces costs in the long term and strengthens the image of the restaurant/snack bar.
• Reusable packaging also reduces single-use packaging costs in the long run; especially if a packaging tax is introduced in your city, reusable options will significantly reduce your packaging costs.
  

Optimize digitalization & delivery service

• Develop and use your own ordering platforms and apps to reduce commissions to external delivery services – this step also costs money initially, but saves money in the long run.
• Ordering machines or QR code orders relieve the burden on staff and contribute to optimized processes.
  

Conclusion: Adaptability is required

The fast food industry is going through a difficult phase, but with the right strategy, businesses can optimize their expenses, reach new target groups, and remain successful in the long term. Changing familiar processes isn't easy. However, without some adjustments, it will be difficult to prepare your fast food business for the future. The most important measures at a glance:

• Use alternative ingredients and new recipes to reduce costs
• Communicate reasons for price increases transparently to guests
• Expand efficient processes & digital ordering systems
• Implement sustainable packaging & reusable systems

The fast food crisis won't pass quickly, and not all measures are easy to implement. However, some of the points mentioned are certainly suitable for you – and if you implement them with support, you can remain competitive even in times of crisis and emerge stronger from the current situation. For example, partner with experts to expand digital ordering options – just as we at Better-Pack support you as packaging experts for your takeaway sales. Together, we can overcome all crises!