Prepare to pay more for your favorite chicken sandwich
The American appetite for a post COVID-19 pandemic return to normal and popular fast food chicken sandwiches is driving up chicken prices.
"The American consumer has been consuming more chicken recently, so you've got an increased demand of chicken products and you've got less hands on deck that can turn around and put the food to the restaurant," said Zenput CEO Vladik Rikhter. "It creates a bit of havoc. We are up pretty significantly in chicken prices and there's a shortage happening."
Zenput works with restaurants and food stores helping them comply with safety regulations at more than 50,000 locations nationwide. Rikhter told Yahoo Finance Live, his clients will soon raise prices.
"At least from what we're hearing from our customers is that inevitably, there's going to be inflation and price increases coming down the pike," he warned.
Restaurant chains, before the pandemic, were able to purchase chicken at roughly $1.30 a pound, according to Rikhter. "But they're starting to see prices that are two to $2.20 a pound instead," he said.
Wingstop Chief Financial Officer Michael Skipworth recently told Yahoo Finance the chain saw prices for bone-in wings rise 25.8% last quarter but that was lower than the 50% competing chains were paying. "You're actually seeing inflation in all parts of the bird, not just wings," Skipworth said.
Restaurant owners tell Rikhter the increased prices and a shortage of employees are cutting into profit margins. "Not to mention, they've got increased labor costs as well right, a $15 minimum wage, not a lot of folks that are currently in the market looking for new jobs and this is putting immense pressure on these places," he said.
KFC announced this week it needs to fill 20,000 permanent positions nationwide to meet the growing demand. "The open positions will vary by restaurant but will include positions at all levels including hourly team members (cooks, prep and customer service), shift leaders, assistant managers and restaurant general managers," according to a KFC press release.
"The shortage on the supply, on the labor side and the supply of certain products is causing them a lot of strife," Rikhter warned.
He predicts pent-up demand will drive consumers to venture out as more people get vaccinated. "So it's going to cause for some interesting pain over the summer," he predicted, as restaurants and stores try to keep up.
Adam Shapiro is co-anchor of Yahoo Finance Live 3pm to 5pm. Follow him on Twitter @Ajshaps
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