Waffle House terminates 50-cent egg supplement; prices reduce.
In a welcome relief for consumers and restaurants alike, popular breakfast chains Waffle House and Denny's have recently announced the removal of their egg surcharges. Denny's lifted its surcharge on May 21, 2022, and Waffle House followed suit by canceling its surcharge on June 2, 2022.
The egg surcharges were initially introduced due to a sharp increase in egg prices caused by supply chain disruptions and avian flu outbreaks that affected egg production. When the prices normalized and declined, these chains removed the extra fee to reflect the lower cost of eggs.
According to USDA data, egg prices peaked earlier in the year due to supply constraints but subsequently decreased, allowing restaurants to drop surcharges. This adjustment signals that the egg market is stabilizing after earlier disruptions.
However, the respite may be temporary. Many restaurants expect the high egg prices to last through 2025, as supply issues persist. This prediction is based on ongoing concerns about avian flu outbreaks and the impact they could have on egg production.
Joe Guszkowski, a senior editor with Restaurant Business covering technology and casual-dining chains, wrote this article. He reported that some breakfast chains, such as Eggs Up Grill and Famous Toastery, did not pass the increased egg costs on to customers. Instead, franchisees of Eggs Up Grill elected to absorb the costs to keep prices affordable, while Famous Toastery planned to steer customers towards limited-time offers using fewer eggs.
As of last week, wholesale egg prices were down 67% from their peak, and retail egg prices were down 27% according to the USDA. Despite this decrease, egg prices are still higher than they were a year ago, indicating that the egg market may still be recovering from the disruptions experienced earlier in the year.
In conclusion, the lifting of egg surcharges by Waffle House and Denny's is a positive sign that the egg market is stabilizing after a period of high costs. However, the high egg prices are expected to persist, and restaurants will continue to face challenges in managing their costs.
Sources: [1] Newspricescom [2] Waffle House press release (June 2, 2022) [3] Denny's press release (May 21, 2022)
Finance executives at Waffle House and Denny's made a strategic business decision to remove the egg surcharges, recognizing the decline in egg prices as a result of a stabilizing market. Furthermore, the lower cost of eggs in the market is expected to impact the overall business expenses in the restaurant industry, potentially leading to more cost management strategies being employed.
