As we approach the Easter and Passover “egg season,” egg prices remain at an all-time high due to an ongoing shortage caused by the widespread avian flu. Businesses in the food and beverage industry that use a large volume of eggs – such as breakfast restaurants IHOP, Waffle House, and Denny’s – have been faced with a dilemma: keep their prices the same or pass the additional cost on to the consumer. Then comes the next wave of decisions for those upping their prices: communicate the changes or stay mum and see if they can slip by without backlash.
Denny’s and Waffle House have both implemented surcharges, and immediately communicated the decision to stakeholders. They shared the facts about the temporary changes and reinforced their commitment to providing their customers with great products and service. Although weekly visits to each of the restaurants have declined since the price hikes, suggesting a negative consumer response, the chains have upheld their decisions. Their decision to communicate transparently about their price hikes appears to have limited any damage to their reputations.
Meanwhile, IHOP has resisted egg surcharges so far, but for how long? The U.S. Department of Agriculture predicted egg prices would rise 20 percent in 2025. Even without imposing an egg surcharge, IHOP is among the national restaurant chains whose menu prices have increased the most since 2020, according to a recently released study that could bring unwanted attention to the chain’s prices.
Regardless of your industry, difficult business decisions are sometimes inevitable, and customer fallout can be common. Stakeholders have always had, and will continue to have, a profound impact on the success of an organization and brand – whether influenced by factors as simple as a price increase or as polarizing as an owner’s stance on current affairs.
Here are a few thought starters you can discuss at your next team meeting to help your leaders and team see whether your business is ready to handle a crisis:
- How would you adapt if a fundamental piece of your supply chain was massively disrupted?
- What are the first steps you would take to insulate your organization from these effects?
- How would your organization manage fallout from a decision that disappointed your stakeholders?
Kith facilitates crisis preparedness workshops that will help your company attain the clarity, trust, and speed you need to respond confidently – no dithering! – to any crisis. We’d be happy to have a conversation about how we can help your company be ready to chart an effective course to reputation protection.
