“Like any good business, we have to do what everyone does — we have to adjust,” Manley said Tuesday. Profit may fall a little, he acknowledged, but the company will still provide a “quality product.”
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If there’s a bright side to the price boost, it’s this: It’s being fueled by strong demand for the product, according to Bloomberg and industry observers.
“There’s no question about it,” Manley said. “Chicken I think is the No. 1 protein in North America right now.”
Beef prices have been high in recent years while pork prices have been relatively lower, he said. The company pairs both of those meats with its mainstay chicken dishes in ways that take advantage of those price spreads.
“When prices go up, we just have to tighten our belts a little bit and make the best of it,” he said. “We recognize that this, too, shall pass, and when it does, we’ll reap the benefits of having a good steady business.”
Nicole Cox, marketing director for Dublin, Ohio-based Roosters Inc., agreed that chicken prices are higher than they have ever been.
“We have no intention of raising our prices,” Cox said. “Our main focus is taking care of our guests, making sure they have great service and a good product. That’s the most important thing to us.”
And while Roosters may be known for its wings, the chain also offers pizzas and subs. “That really kind of offsets the rise. It’s just part of the business,” she said.
Raising prices would be self-defeating, she said.
“If you raise prices, then your guests are hesitant to come in,” Cox said. “They’re watching how much they spend. If we just keep providing affordable, great food and great service, they’re going to keep coming, which helps us push through the rise in these prices.”
The problem is so acute that Minneapolis-based Buffalo Wild Wings has seen its earnings take a substantial hit. Last week, the company reported that its net earnings decreased 62.9 percent to $8.8 million from $23.7 million.
“Our profitability was pressured this quarter driven by historically high wing costs, a mix shift to our promotional days, lower than expected same-store sales, and higher operating expenses,” Sally Smith, the company’s president and chief executive, said in the restaurant chain’s earnings release.
Looking forward to the rest of the year, the company said it expected traditional chicken wing price inflation of 8 percent to 10 percent. (Recall that Buffalo Wild Wings recently ended its popular half-price special for wings.)