With talk of a trade war swirling, investment banking firm Jefferies asked what the potential effects on food costs could be.
While restaurants shouldn’t expect significant changes in 2018 as a result of trade-war talk, gross-margin percentage in 2019 could see a tailwind.
Operators should keep an eye on proteins, as the potential for the supply of pork, chicken and other meats staying domestic could potentially mean lower prices for these goods. While most restaurant operators have locked in food-cost prices for 2018, if the trend continues, food costs may be more favorable in 2019.
The current expectation is for food costs to remain about the same next year, but restaurants most exposed to potential protein-cost deflation include those that specialize in one type of meat, such as steakhouses and chicken-wing concepts.
Contact Marcella Veneziale at [email protected]