---
title: "Why Higher Inflation May No Longer Be Considered ‘Transitory’"
url: https://burnaze.com/article/c614bd27-534b-4a71-bbe3-9c1bdbb554ca
source: "1851 Franchise"
original_url: https://1851franchise.com/capitalspring/why-higher-inflation-may-no-longer-be-considered-transitory-2718097
category: "Restaurants"
industry: "Restaurants"
topics: ["Finance & M&A","Operations"]
published: 2022-03-01T16:11:00.000Z
modified: 2026-11-01T02:13:06.423Z
image: https://newimage.1851franchise.com/cdn-cgi/image/quality=85,format=webp,width=1280,height=720/story/featureImage/0fb52d5b919e611e30d40c08b65e71b93056.jpg
---

# Why Higher Inflation May No Longer Be Considered ‘Transitory’

**TL;DR:** Higher inflation may impact restaurants due to increased costs for food, paper goods, and other expenses. Restaurants are experiencing higher demand from consumers, but also face higher costs and competition for workers, prompting them to boost wages and raise prices.

*originally published in 1851 Franchise on 2022-03-01. [Read the original](https://1851franchise.com/capitalspring/why-higher-inflation-may-no-longer-be-considered-transitory-2718097).*

## Story

In a recent CBS Moneywatch news article, inflation is discussed as price hikes are sending shocks through household budgets, following almost a decade when inflation rose between 1% to 2% annually. But in 2021, inflation is forecast to stand close to 5%, according to the Federal Reserve Bank of Minneapolis. Among the businesses impacted by inflation are restaurants, which are experiencing higher demand from consumers just as they're also facing higher costs for everything from food to paper goods.

Jim Balis, managing director at restaurant investor CapitalSpring's Strategic Operations Group — whose company is invested in 60 different restaurant brands — noted that their businesses saw an uptick in demand as vaccinations spread across the nation. Restaurants are also facing competition for workers, both from other industries that pay higher wages as well as rival dining establishments, he noted. That's prompting his company's restaurants to boost wages, which Balis estimates have risen by about 7% from a year earlier.

"Fortunately, knock on wood, we have been able to [raise] prices to offset these pressures to protect margins," Balis said. "If there was ever a time the consumer was tolerant of those price increases, it is now."

Restaurant owners believed that workers would follow by returning to the labor market after the pandemic unemployment benefits expired in September, but that hasn't happened.

## Entities

- 1851 Franchise (publication)
- Restaurants (sector)
- menu pricing (topic)
- CBS (company)
- labor market (topic)
- Capital Spring (investor)
- Jim Balis (person)
- inflation impact (topic)
- restaurant costs (topic)
- Federal Reserve Bank of Minneapolis (regulator)

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Originally reported by 1851 Franchise (https://1851franchise.com/capitalspring/why-higher-inflation-may-no-longer-be-considered-transitory-2718097). Summarized by Burnaze (https://burnaze.com/article/c614bd27-534b-4a71-bbe3-9c1bdbb554ca).