QSRs prepare for final federal wage hike, tighter margins

QSRs prepare for final federal wage hike, tighter margins
Tags: Burger/Steak/BBQ, Operations Management
June 23, 2009

CNN Money: Quick-service restaurants chains will see another round of margin pressure as the latest minimum wage increase sets in next month, but this round may be more difficult to absorb. Analysts say most QSRs don't have room to slash their work forces without affecting customer service.

Instead, they're likely to focus on training and employee retention programs to cut costs. Other companies, such as McDonald's, which expanded its drive-thru lines and added new drink dispensers, are improving efficiencies to offset cost increases. Burger King is introducing higher-margin products like its miniature Burger Shots.

The fierce value wars could limit QSR chains from raising prices in response to higher costs.

Click to continue