The menu prices at your favorite local coffee shops may be getting a little bit higher and it’s all thanks to the new minimum wage increase.
The minimum wage for workers at all New York City firms with more than 10 employees rose to $15 last Dec. 31, the latest in a series of annual increases that began in 2013 after unions and fast food workers launched the now famous “Fight for $15” campaign. All city workers will be paid $15 this coming Dec. 31, a more than 80% higher than the $7.25 minimum in 2012. However, restaurant owners claim that they have been forced to cut hours, increase menu prices and eliminate jobs as a whole because of increased labor costs.
Prior to the changes, the New York City Hospitality of Alliance conducted a survey from November to December 2018 to investigate how restaurants in New York will address increase labor costs. According to the survey out of 574 restaurants, 87% of those respondents planned to increase their prices to help wage the gap of salary requirements. As a result, many businesses have changed their prices since the bump.
“It may result in customers dining out less or spending less per visit”, Andrew Rigie, Executive Director at the New York Hospitality Alliance tells NYCBizNews. He also adds that customers who are price sensitive may give more comments or complaints to restaurants who change their prices further causing a change in customer purchase behaviors.
At a newly renovated Dunkin Donuts in midtown, customers have already seen changes.
The now named “Dunkin” shop located on 240 W 40thSt changed its menu prices shortly after they renovated their entire location. The shop now comes fully equipped with charging stations, mirrors and seating tables for customers to sit in. A bacon, egg and cheese sandwich went from $4.29 to $4.39 as of January of this year. The long running chain serving signature donuts, breakfast sandwiches and a variety of coffee drinks are known for its low prices compared to its competitor Starbucks. However, with the increase of the minimum wage and high rent cost due to its location, it may not be able to keep up with its “low cost” name.
However, customers like Brandon Yates say there is only so much they are willing to spend on a cup of coffee. A longtime resident in Queens and a frequent customer at this particular Dunkin Donuts adds that having shops like these are convenient and offers a quick bite for those on the go.
When asked on whether or not he will continue to be a loyal customer, Yates adds that if the business continues to offer friendly customer service and cleanliness he would not mind coming back.
“Once I get off the train it’s easy for me to just grab a cup of coffee and head on to work” says Yates who has also been working in the neighborhood for more than 11 years. “But It all depends on the day. I am willing to pay for no more than $5 bucks on a cup of coffee”.
A spokesperson from Dunkin tells NYC Biz News that while it suggests retail prices its individual franchises are owned and operated by independent who are solely responsible for making their own business decisions, including setting pricing in their restaurants.
Since its new changes across all locations, sales for Dunkin have continue to rise. Dunkin continues to provide its customers with new offerings such as their cold brew and quick ordering through their On-The-Go mobile ordering.
A current employee who asked to be unnamed says that the franchise currently pays its workers $15 dollars. Depending on your experience in dinning your chances of being paid more increases.
But the real question is, will companies like Dunkin Donuts keep their menu the same or further increase as minimum wage battle continues? As of right now there is no planned increase in the minimum wage in sight for NYC workers, except for small employers moving to $15 this January 1st.