> High minimum wages are making it nearly impossible to run small restaurants.
Not as much as one would think.
Rent (literal) and rent seeking (lending in this case) are the biggest drivers in food costs today.
The family restaurant in an owned building is a distant memory.
The wholesale price of food is very low at the point of production (farming) and absolutely bonkers at the retail and wholesale levels. Mostly because at every step of the chain there is debt, and massive interest payments that need to be made.
The HN set is on one side of the K shaped economy and the other half is looking very much like late stage capitalism.
Case in point: Fritos. 4.50 a bag, while the Walmart generic version is under 2 bucks. Why? Because Pepsi (owner of Fritos) is competing with apple for customers, aka SHAREHOLDERS, and has a massive amount of debt compared to Walmart. The primary input in Fritos is corn, whos price is close to 2019 levels.
I don’t think that story illustrates the point you think it does. Prices aren’t based on cost, they’re based on perceived value on the part of the buyer, and the marketing and brand recognition behind Fritos raises its perceived value much higher than the generic brand.
To put it another way: all generic brands are cheaper than their name-brand counterparts, and that fact has nothing to do with debt or cost structures.
The lower bound of a price is the cost (or ability and willingness of a seller to sell), the higher bound of a price is the ability and willingness of a buyer to pay.
Not as much as one would think.
Rent (literal) and rent seeking (lending in this case) are the biggest drivers in food costs today.
The family restaurant in an owned building is a distant memory.
The wholesale price of food is very low at the point of production (farming) and absolutely bonkers at the retail and wholesale levels. Mostly because at every step of the chain there is debt, and massive interest payments that need to be made.
The HN set is on one side of the K shaped economy and the other half is looking very much like late stage capitalism.
Case in point: Fritos. 4.50 a bag, while the Walmart generic version is under 2 bucks. Why? Because Pepsi (owner of Fritos) is competing with apple for customers, aka SHAREHOLDERS, and has a massive amount of debt compared to Walmart. The primary input in Fritos is corn, whos price is close to 2019 levels.