How to combat inflation? Great 'food, service, and vibes' says Catch Hospitality
The leisure and hospitality industry is on the up, but still kind of a mixed bag, reflecting the impact of the COVID-19 pandemic as well as persistent inflation.
Case in point: In the month of June, 21,000 jobs in the overall industry were added, according to the US Bureau of Labor Statistics. But jobs in restaurants and bars dropped by nearly 1,000 positions, or 0.8%. Levels are also still below February 2020 numbers by about 80,000 fewer jobs, per Nation's Restaurant News.
On Yahoo Finance Live (video above), Eugene Remm of Catch Hospitality Group, with six locations across the US in cities like New York, Los Angeles and Las Vegas, weighed in on the industry overall and how his company is recruiting and maintaining talent in a tough job market. And, of course, combating inflation. Here are some highlights:
Restaurants return to full-staff — finally
Remm said his locations are now fully staffed for "the first time in about two years."
He added: "That's important because once you can get completely staffed...you can focus on not just filling the role, but actually getting the best people for the role and making sure that you're elevating those people."
Now, his company is planning for its expansion in Miami Beach, Dallas, and one other location that is yet to be disclosed. He plans to hire roughly 1,000 people. His current staff will get the first chance to relocate, he said, adding that "it's not just paying people," it's them believing in the mission too.
"We need to create and maintain the culture...they need to believe in what you're doing. They need to be curators of experiences."
Food prices have been dropping "a little bit"
Overall food inflation remains higher, up 6.7% year-over-year in May, That's according to the Bureau of Labor Statistics (BLS) May Consumer Price Index (CPI). Food at restaurants and bars is driving that number higher, up 8.3% year-over-year.
"We've seen things actually dropping a little bit," Remm said, "There are certain things like lobster, which is super expensive, and crab, which is super expensive, and those items, you just sometimes have to take off" the menu.
Why? Menu price shock may leave customers unsettled.
"If you used to pay $10 for a specific item, it would look really strange to just pay $30 for it, but that's what the cost has become," he said.
Remm's team, which includes Mark Birnbaum and Tilman Fertitta, who is also the owner of the NBA's Houston Rockets, are constantly taking a closer look at the menu. He added: "We look for where we can find that balance to give the customer value without crushing the business."
Inflation beater?
Remm said customers, despite inflation, are still willing to pay for the full restaurant experience.
"Food has been underpriced and I think that the price increases have been fair to what we need to do to survive because you would never, never be able to pay $100 at home to have that full experience."
He believes cooking at home, a pandemic-era trend that is still with us, can't replicate a night dining out.
"You'd never be able to afford...the seven different plates for seven different dishes, you wouldn't be able to afford the entire experience... $100 for two hours of a full experience, I think of it like a night out and I think it's a fair price."
Consumers don't seem to be losing too much interest in paying to dine out. A recent report from Yelp found that interest in higher-priced restaurants — noted by the dollar signs $$$ and $$$$ — is up nearly 10% and 17% respectively compared to pre-pandemic levels.
—
Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email her at bdipalma@yahoofinance.com.
Read the latest financial and business news from Yahoo Finance
Download the Yahoo Finance app for Apple or Android
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube
