​Restaurant-specific responses to inflation

To be sure, restaurants are still feeling the pain of inflation -- even more so than other sectors of the economy. In the last quarter of 2022, some operators scaled down their hiring plans, even over the busy holiday season, according to a report from Alignable. But a recent report from CNBC indicates that inflation impacts large, national or international brands differently than it impacts smaller independent brands -- and surviving this period of high inflation is about all of these businesses leaning on the different advantages they possess. For instance, powerful brands like Starbucks or Domino's can use their size and buying power to leverage better prices on ingredients -- but being nimble enough to make quick menu changes can be far more difficult for them. On the flip side, while independent brands may lack the resources and buying power of larger brands, their reputation for authenticity can benefit from public goodwill. Consumers tend to want to support small businesses in tough economic times. With that in mind, restaurants can lean into their unique advantages -- large brands can play up the value they can offer right now, while smaller ones may have more leeway on price if they can promote the authenticity of their brand and the people behind it.

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