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Are Food & Beverage CFOs planning for minimum wage hike?

Brian Kennedy's Profile

Outside of agriculture lodging, few industry sectors rely on minimum wage earners than the Food & Beverage industry. I assume they have built contingency forecasts for a minimum wage hike, but I wonder how they are communicating the possibility to different audiences – i.e. creditors vs. analysts. I do expect that many will learn from the experience of John Schnatter, Papa John’s CEO, who complained that Obamacare would force him to lay workers off. That resulted in threatened boycotts until he backed off.  Some states have minimum wages subsidized by tips so I am not sure if the new proposal will chance this. http://www.dol.gov/whd/state/tipped.htm

Answers

David Renaud
Title: Principal
Company: Renaud Advisors
(Principal, Renaud Advisors) |

For my clients in the QSR segment, we are in constant communication with banker and other parties, keeping them up to date with issues that may impact bottom line performance. QSR's typically don't have a tip model, so changes in minimum wages have a profound impact on profitability. As the cost of Obamacare becomes fully understood, consumers will need to be prepared to pay more. John Schnatter was right on the mark with his comments and should be commended.

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