Business

People don’t cut tips even when inflation is so high


Chef Alessandro Pirozzi, from Chef Pirozzi’s Alessa, talks to customers at an outside table at the Promenade on Forest in Laguna Beach, CA on Wednesday, January 13, 2021.

Paul Bersebach | MediaNews Group | beautiful pictures

Even when restaurants and fast food chains increase menu prices, customers do not withdraw tips to waiters and cashiers, according to a new report.

Diners dropped an average of 19.6% at full-service restaurants and 16.9% at quick-service eateries in the second quarter, roughly the same as a year ago, according to sales data from hardware suppliers. soft Grill. In-person diners are generally more generous, averaging 19.7%, according to the report. Delivery or takeout customers averaged 14.5%.

The average tip is up nearly 10% year over year – slightly more than restaurant menu prices have increased last year, Toast said. The cost of food away from home rose 7.6% in the 12 months ended July, according to the Bureau of Labor Statistics.

“While there is some anecdotal feedback on whether inflation is affecting the rate at which people are falling, we don’t see that in our data,” Toast co-founder and CEO Aman Narang told CNBC.

Other payment software providers have reported that restaurant tips have decreased after an earlier increase in Covid pandemic. For example, Toast rival Square found that the average tip at quick-service restaurants fell from 17.2% to 15.2% between March 2021 and the end of February, according to a report. . from The Wall Street Journal.

Both Toast and Square’s software can be customized to prompt customers to tip at different rates, such as 10%, 15%, or 20% for a full-service restaurant, or $1, $2 or $3 at a coffee shop.

“Definitely our technology was a driving factor,” Narang said.

As inflation puts pressure on household budgets, restaurant chains include McDonald’s and Mexican Grilled Chipotle yes said low-income customers spend less money at their location and higher income consumers visit more often. Others, like Outback Steakhouse owner Bloomin’ Brandssaid diners have yet to change their spending habits – or even appear willing to pay for more expensive options.

Toast compiles a quarterly report on restaurant trends by collecting data collected from approximately 68,000 restaurants using its software. Its customers range from independent eateries to mid-sized regional chains.

The report also said that full-service restaurant sales had returned to pre-pandemic levels for the first time in the second quarter. Instead, sit-down eateries have been hit hardest by the crisis as consumers cook more meals at home or order through fast food driveways.



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