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Issues at This Beloved Burger Chain Are Slowing Down Its Sales

From record popularity to a recent slump.

Two major operational issues of our day are hurting sales at Jack in the Box.

Jack in the Box is one of America's largest fast-food chains, with more than 2,200 locations and annual systemwide sales of nearly $3.7 billion. But in recent months, the company has seen its sales negatively affected by two major issues being felt across the restaurant industry at large: labor shortages and supply chain hurdles.

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According to Restaurant Business, the chain's lack of workers, especially during late-night shifts, led to an overall reduction in sales of about 3% in recent months, while supply chain issues reduced sales by another 1%. It's worth noting that sales were up by 0.6% at franchised stores, which constitute the bulk of the chain's footprint, but the figures were dragged down to 0.1% growth based on a 4.4% decline in sales at company-operated locations.

The systemwide same-store sales growth of 0.1% during this fiscal period was so much slower than in previous quarters that it is hardly a success. For reference, the company had its best quarter in nearly 30 years at the end of 2020, with same-store sales up by 12.5%.

So, what's causing the trouble at the popular burger chain? First, Jack in the Box has been hit with the severe labor shortages seen across the foodservice industry and beyond. A lack of workers has led to shorter operating hours at myriad companies nationwide, according to Fortune, and at several fast-food giants like McDonald's and Popeyes. Fewer hands on deck mean fewer hours of operation and lower efficiency while open, which is a recipe for a sales decline.

Jack in the Box is also suffering from supply chain issues, a problem that was magnified by a staff walkout at one of its food distribution centers supplying a network of restaurants.

To bolster its flagging numbers, Jack in the Box is looking to price increases. Customers can expect to see what company executives are calling a "mid to high-single-digit" increase in menu prices in 2022, according to Restaurant Business.

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Steven John
Steven John is a freelancer writer for Eat This, Not That! based just outside New York City. Read more about Steven