Restaurants and other hourly-paying businesses that are struggling to stay fully staffed may profit from a weak labor market and ongoing layoffs.
That’s according to a Seeking Alpha post on Sunday, which cites a Bank of America research. This comes just two days after the U.S. Bureau of Labor Statistics released its monthly jobs report, which showed the U.S. economy created 223,000 non-farm jobs in December.
As previously said, while this figure was greater than expected, it was still lower than the year’s average monthly increase of 375,000. It was also the fourth month of decreases in a row, as well as the lowest monthly job creation data in two years.
“The bright side of a recession is that costs generally decline — even when supply-related limitations exist,” noted Sara Senatore, a BofA stock analyst. “Labor availability is improving. Both help restaurant entrepreneurs who incur the costs of running a business.”
According to her data, growth in restaurant job vacancies peaked in late 2021 and has since declined as staff turnover increases.
“As labor inflation slows, we believe pizza is ideally positioned for increasingly budget-conscious consumers,” Senatore added. “The benefits of a lax labor market should be reflected in the system’s compositions (driver availability), margins (wages), and unit growth (staff).”
The restaurant industry’s continuous labor issues prompted an increase in innovation and investment in automation technology that can cut staff and cost last year. According to study, without this technology, some restaurant managers were forced to turn away potential clients.
