"No Staff to Open Doors"...Severe Labor Shortage in US Food Industry

Photo by WSJ

[Asia Economy Reporter Yujin Cho] The Wall Street Journal (WSJ) reported on the 3rd (local time) that the tight labor market is hindering the growth of the U.S. food industry, which is being reshaped by COVID-19.

Supermarkets and restaurants across the U.S., accelerating the pace of economic reopening amid COVID-19, plan to reopen closed stores and increase the number of branches, but are struggling to secure manpower due to a shortage of available workers.

The global burger chain Shake Shack is planning to open more than 40 new locations this year, but the hiring situation is concerning. CEO Randy Garutti predicted, "It will not be easy to fill all the necessary positions within this year."

Midwestern grocery chain Fresh and Counter has only filled 15 out of 100 required positions for its newly opened stores, and the Italian restaurant franchise Fazoli's has indefinitely postponed its new store opening schedule due to labor shortages.

Don FitzGerald, CEO of Dom's Kitchen and Market headquartered in Chicago, lamented, "It is even difficult to find people who want to come for job interviews."

According to the U.S. Department of Labor, as of the end of March, there were a total of 8.01 million job vacancies, including 993,000 in restaurants and hotels and 878,000 in retail stores.

According to the ADP National Employment Report, employment in companies with fewer than 20 employees increased by only 13.5% year-over-year in April, and employment in companies with 20 to 49 employees increased by 15.9%.

These companies are increasing employment thanks to COVID-19 vaccine distribution and rising demand, but unemployed individuals are delaying their return to work due to fears of virus infection, reduced childcare services, and generous unemployment benefits.

Desperate due to the labor shortage, these companies are offering wage increases and incentives, but WSJ pointed out that profit declines caused by higher labor costs will lead to growth limitations.

Fazoli's recently decided to raise worker wages by 3%, estimating an annual profit decline of $100,000. A Fazoli's representative said, "The losses from wage increases will be passed on to consumers through product price increases and other methods."

This content was produced with the assistance of AI translation services.