OLeary Ventures Chairman Kevin OLeary joins “The Big Money Show” to discuss the ongoing push for electric vehicles and California’s decision to increase the minimum wage.
fast food prices California wages are expected to rise this spring as companies respond to the state’s $20-an-hour minimum wage law for fast-food workers, which goes into effect on April 1, 2024.
The law, signed by California Governor Gavin Newsom last fall, will require a minimum wage of $20 an hour for all restaurants with at least 60 locations nationwide, with an exception for restaurants that make and sell their own bread. include.
Several major fast-food franchises, including McDonald’s and Chipotle, have already indicated they will need to raise prices in response to rising labor costs.
“Everyone is going to have to pay more money,” said Jack Hartung, Chipotle’s chief financial officer. wall street journal. The California-based company expects to raise prices an additional approximately 5% to 9% at its Golden State restaurants to cover costs.
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Chipotle said the 5% to 9% increase is likely due to California’s minimum wage law. (Gina Moon/Bloomberg via Getty Images/Getty Images)
Hartung told the Journal in November: Chipotle labor costs He said this would be “significant enough to hurt our economy,” which he said would be in the 15% to 20% range.
He said at the time that he did not expect any immediate impact on the restaurant’s opening plans, but added that customer reaction to the price increase would be factored into the decision. Chipotle is expected to report earnings after the bell on Tuesday.
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McDonald’s CEO Chris Kempczinski said at an October earnings conference. fast food giant The company would need to raise the amount, even though it had not decided at the time how much it would raise.
“Certainly there are some factors that need to be addressed with higher pricing,” Kempczinski said. “The franchisees that I know and their teams are going to be looking at in terms of productivity. How that plays out is that cash flow for franchisees in California in the short term. It’s definitely going to take a hit. It’s going to be tough.” With some mitigation measures, we don’t know exactly what the impact will be. ”
McDonald’s is one of the fast food chains that anticipates having to raise prices in California due to the minimum wage hike. (Justin Sullivan/Getty Images/Getty Images)
McDonald’s is scheduled to release its financial results before the opening bell on Monday.
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| CMG | Chipotle Mexican Grill Co., Ltd. | 2,482.12 | +40.73 | +1.67% |
| M.C.D. | McDonald’s Co., Ltd. | 297.05 | -1.03 | -0.35% |
| jack | Jack in the Box Co., Ltd. | 78.94 | -0.41 | -0.52% |
| QSR | Restaurant Brands International Co., Ltd. | 79.31 | -0.09 | -0.11% |
Jack in the Box said in its November earnings call that it expects to raise prices companywide by 6% to 8%, primarily to address increased labor costs stemming from California law. The company is likely to provide an update when it releases earnings later this month.
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Burger King is adding kiosks to help restaurants increase efficiency for employees and customers. (Paul Weaver/SOPA Images/LightRocket via Getty Images/Getty Images)
Some restaurants may look to increased automation as a way to mitigate the impact of minimum wage increases on the industry.
Josh Kobza, CEO of Burger King’s parent company Restaurant Brands International, told investors on an earnings call in November that the chain plans to accelerate the rollout of digital ordering kiosks, which will help restaurant workers He said staff will be able to focus more on preparing food and ordering will be more accurate. , reducing stressful interactions between employees and customers.
“My view is that this business needs to be 100% digital,” Kobza said. “You should take the time to place all your orders through digital ordering channels.”
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california minimum wage Hourly wages for all jobs in the state rose to $16 an hour in January, up from $15.50 an hour, which was already the highest in the nation.
