Several fast-food chains are upping their prices, looking to cover higher costs on things like ingredients, transport, and labor as the minimum wage inches up.
“Clearly it’s a challenge, but we find in our business the bigger challenge is labor availability period,” A&W Restaurants CEO Kevin Bazner told FOX Business' Maria Bartiromo on Tuesday. “Forget the minimum wage, it’s really the availability of labor.”
But Bazner said you can’t hire people at minimum wage, you have to pay them more.
“You have to pay 10 to 12 dollars, just to be in the game,” he said. However, he stressed labor availability is the bigger challenge and added that the minimum wage worker is an entry-level employee, the teenager, a member of the part-time workforce, a younger or older person with a second job.
“The impact of the $15 minimum wage is going to be less, less labor hours…you’re going to have to take the labor out of the business model,” Bazner said. “The higher the minimum wage if you made, the more you’re going to look at reducing labor costs, labor hours.”
Bazner said A&W is focusing on retaining its employees because many people leave the restaurant industry over a lack of appreciation and training.
“We’re attacking both of those areas,” he said. “Respecting the people that work for you, providing them with a good working environment, provide them with the appropriate training and using technology to do all that.”
As for the meatless trend, A&W Canada has a partnership with Beyond Meat. Bazner said the plant-based products are already being tested at 20 U.S. A&W locations.
A&W broke from Yum Brand back in 2011 and since then, Bazner said the business has stabilized after more than a decade of decline.
We’re growing the business again, we’ve stabilized store counts both here and in Southeast Asia where we have a strong international presence and things are going well," he said. "We’re outperforming the industry in terms of same-store sales.”
“Our whole value proposition is quality,” Bazner added. “People will pay for, and wait for, and appreciate quality.”
The company marked its centennial this summer becoming the first franchised restaurant chain to turn 100. It gave away free Root Beer Floats and collected donations for Disabled American Veterans on National Root Beer Float Day on August 6. In 1919, A&W founder Roy Allen welcomed troops home from WWl during a parade in California, serving A&W Root Beer.