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The State of the Restaurant Industry: Minimum Wage Hikes, Inflation, and Competition Squeeze Profits

The State of the Restaurant Industry: Minimum Wage Hikes, Inflation, and Competition Squeeze Profits
Workers fill food orders at a Chipotle restaurant in San Rafael, Calif., on April 1, 2024. Justin Sullivan/Getty Images
Panos Mourdoukoutas
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U.S. restaurants have been caught between minimum wage hikes and rising food material costs on one side and growing competition on the other, squeezing profit margins.

Recent financial reports show a slowdown in restaurant revenues and a rise in labor and materials costs. These two trends have resulted in lower gross margins, disappointing industry investors.

Panos Mourdoukoutas
Panos Mourdoukoutas
Author
Panos Mourdoukoutas is a professor of economics at Long Island University in New York City. He also teaches security analysis at Columbia University. He’s been published in professional journals and magazines, including Forbes, Investopedia, Barron's, IBT, and Journal of Financial Research. He’s also the author of many books, including “Business Strategy in a Semiglobal Economy” and “China's Challenge.”