Bloomberg — American restaurant chains are struggling to get the kitchen equipment they need to open new locations, adding to the hurdles for an industry already grappling with a labor crunch and rising costs.
Papa John’s International Inc. is facing a shortage of ovens and walk-in coolers for its pizzas, while smaller chains including A&W Restaurants and Layne’s Chicken Fingers can’t get sufficient quantities of fryers. The companies point to a supply-chain crisis that’s hampering the movement of goods around the globe, potentially delaying expansion plans.
“It’s definitely getting more challenging to get this equipment on the timelines that we used to be able to get it,” Papa John’s Chief Executive Officer Rob Lynch said in an interview Thursday following earnings. The company sources from China, along with other parts of Asia and Europe. “We’re trying to find new suppliers that can complement our current suppliers.”
The supply crunch dogging the global shipping industry is causing headaches for virtually every type of business that relies on suppliers overseas. While domestic restaurants don’t necessarily import a lot of food, companies often get ovens, coolers and fry vats from outside the U.S.
Papa John’s hasn’t had to delay expansion plans yet, but Lynch said the equipment situation presents a “short-term risk on the timing of the openings.”
Texas-based Layne’s has delayed the opening of several locations due to a dearth of fryers to cook chicken -- its main product. Each location has seven fryers.
“If I order a fryer today, it would probably not be ready until April or March of next year,” said Chief Operating Officer Samir Wattar. “I have the pipeline to open restaurants, the problem is: Can I open with everything that’s going on?”
To combat the shortage, A&W has started stockpiling key items such as stainless steel mixing vats and fryers for french fries -- a must-have menu item for fast food. The chain has already delayed new store openings because of a lack of equipment, which often contain parts from overseas, said CEO Kevin Bazner.
“We are contracting for more stuff than we need right now so we can have it on hand,” he said.
Bazner acknowledged that ordering extra equipment actually puts more burden on suppliers at a time when they can barely keep up. “Ironically, that puts more stress on the supply chain.”