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How Club Managers can better navigate the current inflationary landscape

You're not imagining it.

Inflation is changing the way the club industry is doing business.

If your club operation has felt the squeeze of higher costs and slower supply chains, you're not alone.

The consumer price index has reached a 40-year high, broadline shipping costs are up nearly 65 index points and staff wages are up 2.1x in the U.S. versus Pre-COVID wages.

As a result, club managers around the country are being forced to institute an average membership dues increase of 10%+ in hopes of avoiding an assessment to offset the rising costs of the goods and services that are critical to their club’s operations.

How inflation is impacting hospitality-driven businesses

For industries focusing on customer experience via food and beverages, inflation presents an ongoing challenge on three distinct fronts.

The supply chain is improving, but it remains strained

With pent-up demand as well as geopolitical conflict, traditional routes for attaining materials and goods have been significantly disrupted — if not broken outright.

And even when supplies are more readily available, the ongoing shortage of truck drivers has made it difficult for businesses to keep up with demand.

The labor market is more competitive

Beyond labor shortages in areas like food processing and packaging driving costs higher, demand is growing as operators backfill more roles. For workers, that means competitive wages and benefits are table stakes as they consider more choices and more flexible work situations.

One trucking company cited that they are offering significant signing bonuses and starting salaries of $86K+ to entice CDL drivers to accept job offers. And while their labor situations have improved, they're still having challenges filling some positions.

Club members are more selective in how & where they spend

As inflation rises, the consumer’s purchasing power declines — making them more likely to weigh menu options and value when deciding where to eat.

Club members are noticing higher menu prices, and many are seeking out more specials and deals when choosing to dine out while others are cooking at home more often because of those price increases.

Food & beverage sales have not historically been viewed as a profit center for most private clubs and with inflation still lingering from the effects of the pandemic, club managers must create a long-term strategy to mitigate the ripple effect from spreading horizontally across the operation.

Finding the right solution to stay ahead of the curve

While rising costs of goods aren’t going anywhere, leveraging the right purchasing partner will help your club employ a forward-thinking approach to protect margins. This can be done by creating cost-saving, inventory-improving strategies that promote best practices.

As an industry leading performance improvement consultancy, Club Capital Group focuses on cost management strategies to reduce operational costs and help clubs boost profitability in virtually every spend category, including food & beverage purchasing.

Club Capital is not a fee-based service. Your club will never receive an invoice for leveraging our services.

To learn more about how you can protect your bottom line risk-free, contact us today

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