Question

You are the CEO of Sweetgreen, the "fast food" salad chain. You have been hearing in the news that the national unemployment is at its lowest 10 years, GDP is growing at the best rate in 9 years and the rate of inflation is higher than it has been in 10 years.

a)Explain how the unemployment rate could impact the demand for Sweetgreen products.

b)Explain how the unemployment rate could impact whether you have enough workers for your stores.

c)Explain how the rate of inflation could impact the demand for Sweergreen products.

d)Explain how the rate of inflation could impact whether you have enough workers for your stores.

Answer 1

a) Since the unemployment rate is lowest in 10 years that means less people and more jobs which will increase salaries and wages of the employees. If salaries increases it will increase demands of the products available in the market as more earning will result in more spending. So low unemployment rate will increase the demand for Sweetgreen products.

b) Since the unemployment rate is low and demand is increasing for Sweetgreen products, it means that more employees will be needed for catering the increasing demand. New employees will not be easily available and if they are available they will be charging higher salary and wages. If you add new employees with higher salary its going to impact the motivation level of the existing employees. They can also demand increase in salary. You will have to manage equity in them.

c) Since the inflation rated is going up it will impact the sale of Sweetgreen product, the sale will increase as there will be more buyers in the market.

d) Since the inflation rate is high your existing employees can also demand for increase in salary as due to inflation they want to earn more and if salary is not increased they may leave your organisation and can join at other place with increased salary. So you have to keep your employees motivated by increasing their salaries and its difficult to find new workers for your store even you are ready to give high salaries.