"High Costs Shrink Restaurant Profit"

05/22/2013 - 08h53

Restaurant prices in São Paulo have been on the news. Keeping a restaurant open in Brazil has been a big challenge for sector entrepreneurs.
Our food is increasing in value, even at a international level, but infrastructure, labor and raw material costs, is all-time high and far from economic factors, growing exponentially.

We understand the public is feeling the high prices. But if, on the one hand, eating out is expensive now, for entrepreneurs, profit is shrinking.

Letícia Moreira/Folhapress

the average increase in restaurant costs including rent and condominium was 90.9%.

We, restaurant owners, have met to discuss the issue and commissioned a study from financial consultant Nilton Guedes, a restaurant specialist, to try to understand the causes and give a diagnosis.

From 2008 and 2012, the average increase in restaurant costs including rent and condominium was 90.9%. That means, it practically doubled in four years. In the same period, menu prices have risen 25%.

Salaries rose 49.5% - well above inflation and the collective agreement from the sector (27.4%). This increase occurs mainly by fierce competition in the sector.
Besides seeing the evolution of traditional costs, we now have new demands, such as more investment in security.

Despite the adverse scenario, the study found that the buying process is more efficient, with reductions in raw materials costs (from 22.7% to 19.4%) and beverages (11.2% to 10.2%).

The fight against waste and employee qualification are also more assimilated practices so there is price competitiveness, customer satisfaction and, of course, a return on investment.

Finally, it is important to note that our survey included an average number of ANR (National Restaurant Association) members, representing about 300 brands and over 5,000 commercial places in the country.

SÉRGIO KUCZYNSKI is the vice president of the National Restaurant Association and the owner of Arabia restaurant, in São Paulo.

Translated by SIMONE PALMA

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