Major Restaurant Operator Increases Prices After Minimum Wage Hike

Published March 13, 2018 at 4:33 am

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If you’ve been wondering whether the recent minimum wage hike has played a part in increasing menu prices across the province, the answer is yes – ever so slightly.

You might not have even noticed.

According to major restaurant operator Cara Operations Ltd – the company that manages such big chainsas Swiss Chalet, Harvey’s, Kelsey’s, and Milestones – the company has taken action on food costs to manage the wage increase. 

According to the Canadian Press, Cara has made selective price increases and menu changes at its many restaurants to deal with Ontario’s wage increase to $14 per hour for minimum wage workers across the province.

The major operator has, however, been managing well in wake of the wage increase, according to a recent statement.

“Initiatives taken on labour and food cost as a percent of sales have been successful in mitigating the higher labour cost dollars and, therefore, gross margin dollars are comparable to prior year,” said Cara.

This is all well and good for employees and Cara restaurants, which can maintain wages and sales. According to the Canadian Press, Cara hasn’t seen evidence of customers pushing back against the selective price increases so far.

The wage increase, which came into effect on January 1, 2018, has sparked debate about how businesses with minimum wage employees will be impacted by the change. Some have slashed employee benefits, some have slashed employees, and for some, it’s hardly noticeable.

In Cara’s case, the price increases have been minimal, and menu items that are “labour-intensive or have costly components” have been removed, according to the Canadian Press.

And sales are currently stronger in Ontario than in the rest of Canada, says Cara’s recent quarterly report.

But it’s still too early to tell how the minimum wage increase will affect Cara’s brands in the long run.

”[…] we are still very early with the information available and our analysis indicates the higher sales versus last year is a key factor in mitigating the higher labour costs,” said the company.

The Vaughan, Ont.-based company boasts 1,272 locations under 18 brands.

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