As we were preparing this newsletter for publication, the Federal Reserve announced plans to raise interest rates by three-quarters of a percentage point – its biggest interest rate increase since 1994, following an increase of half a percentage point in May.
No doubt, the recent announcement of inflation hitting its highest point in 40 years contributed to the significant action. A recent survey of economists found that two-thirds of economists believe a recession is on the horizon in 2023. However, the forecast isn’t entirely gloomy. Morgan Stanley CEO James Gorman predicted that while investors could be in for a bumpy ride, fundamentals remain strong and the downturn is not likely to be severe. Bank of America echoed that optimism, reporting that its corporate clients continue to borrow, that credit quality in the travel, restaurant and hotel sectors is improving, and loan growth is expected in the high single digits. Some experts are saying that a two-speed consumer economy could even emerge from this, with the households that were able to save large sums of money during the pandemic continuing to spend.
Still, the mounting uncertainty will make it all the more critical for restaurant operators to not only be nimble, but to also run business with greater control by monitoring and managing fluctuating costs from a range of sources. If you’re looking for help with these issues, contact Team Four Foodservice today. Team Four has experts in every aspect of the foodservice industry. The company can assist in navigating everything from the impact of rising inflation to suggestions on how to manage labor shortages.
Foodservice CEO is provided for informational purposes only. It is intended to offer foodservice operators’ guidance regarding best practices in running their operations. Adherence to any recommendations included in this Guidance will not ensure a successful operation in every situation. Furthermore, the recommendations contained in this website should not be interpreted as setting a standard of operation or be deemed inclusive of all methods of operating nor exclusive of other methods of operating.
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