Labor costs too…
Though each of the so-called fast foods or quick service items mentioned probably account for a large percentage of foods consumed when people eat out, especially lunch, I’m guessing labor costs vary greatly for the preparation/assembly of the items featured.
At one of the highest rated and award winning Mexican restaurants in Los Angeles, you pay around $8 for a “super burrito” with a choice of veggies, fish, pork, chicken, goat, tongue, or beef as the “meat” component. The dish comes with guacamole, sour cream, chips, salsa, a red mole type sauce, and cured garlic, onions, carrots, and jalapeno peppers. Comparing your costs to this restaurant’s offering seems to skew even the lower cost pork burrito toward a high-end offering.
So the question becomes, using your cost charts as a baseline, how do they do it and stay in business?
Do they use crappy ingredients? No. I know for a fact they spend higher than the norm on ingredients.
Do they have slave labor? No. They pay above industry norm and treat their employees as family.
Are they in a run down part of town. No. Their rents are near the top of scale for West LA.
And, they have traction as they been in business for almost two decades.
So why the disparity in your numbers and theirs? Though your veggie costs seem in line with average LA costs, your meat and bread costs ($.52 for a hamburger bun?) seem very high.
I thought your presentation was well constructed and informative even though I’m questioning some costs. But, for me, the thing missing from your metrics was labor costs.
The reason I have an interest in knowing more about labor cost impact, is the trends in many California (and West Coast states for that matter) toward paying hospitality workers a living wage and not a minimum wage will certainly cull the losers from the crowded restaurant field.
One last thought.
What percentage of market share is the rise of “boxed food” delivery services costing both the restaurant and the grocery business.
I hope to read more of your posts…
