Inflation has been brutal on the industry. Saved a 4-location retail bakery chain in my hometown from collapse in mid-2020. Converted 2 locations from "bakery cafes" with 60-80 seating to no-seating, quick pick-up locations with much larger production capacity and an online order focus. Shutdown one location that was not in a neighborhood that was going to support 2-3x increased prices. Turnaround has been going great and we've managed to save 100 jobs and go breakeven on our original investment 18 months following re-opening.

We treat the 4th location which has the most upscale geography as our lowest margin "loss leader" by retaining the bakery cafe model and have used it to move the brand upmarket significantly. Total input costs are up 70-80% and in response we've moved pricing on staple items up 2x and tacked on upsell to increase AOV from $14 to almost $50.

A lot of you are going to dislike what I wrote above, but this is how we survived. Even after all that, the business has only 8% margins vs. the 40%+ margins in our B2B SaaS portfolio (what I did before taking this project on).

And we had planned out this upscaling playbook before inflation was even a concept. Rents are up, energy costs are up, water costs are up, and we're now paying our average employee 50% more. If we had tried to preserve what was there, we'd probably be out $2M+