Restaurants raising prices as inflation soars
Wholesale price for food is up more than 18 percent
RICHMOND, Va. (WWBT) - Gas prices aren’t the only headache for some consumers; a trip to the grocery store is becoming harder to swallow all because of inflation. And now, those same price hikes are creeping up on the menus of your favorite restaurant.
“The price of chicken is 40 percent more than it was a year ago. A hamburger was a dollar more than it was a year and a half ago,” restaurant consultant Mike Byrne said. “Restaurants are buying differently. They’re taking some things off of the menu, and people that are going into restaurants have the same expectations.”
It’s not just consumers who are having to stomach higher menu prices. Bryne says restaurants like The Grill on Libbie Avenue and other local businesses are also seeing their operating costs skyrocket.
“For every dollar a customer spends at a restaurant, the restauranteur at the end of the day after they pay for the product, staff, insurance, lights, temperature music, they want to have at least 15 cents left over if they’re good,” Byrne said. “They want to make at least 10 cents on every dollar spent if they’re not so good, and zero if it’s bad. Right now, we’re in a challenging phase, and you have to be doing enough volume to make any money at all.”
It’s not just menu prices that are increasing. Businesses are paying more for the things you don’t have to. It is the things customers don’t pay for like napkins, staws, carryout boxes, and condiments, among other things, because of inflation, which in turn, comes back to increased menu prices and additional fees for service on your bill.
“The costs of non-foods, paper goods, napkins, straws, all the things that we use to operate a restaurant that a customer never sees or buys, all that stuff still cost every day,” Byrne said. “It’s inflation on top of the supply chain.”
Virginia Restaurant, Lodging and Travel Association President Eric Terry says it’s a trend restaurants across the state are seeing.
“We’ve seen restaurant pricing go up year over year by about 8 percent again following the inflation numbers we’ve been seeing,” Terry said.
“If you go into a restaurant right now, you’re going to pay more for your center-plate items if you order a steak, or a pork chop, or a chicken entrée. You’re going to have to pay a couple of dollars more until the supplied chin opens up and there is more product available,” Byrne said.
But the spike in wholesale pricing for food is much sharper. According to the National Restaurant Association, it’s as much as 18 percent, the highest 12-month increase in over five decades.
“The businesses have found that they really have to adjust pricing just to pay for those increased costs, and ultimately, it’s going to have to be paid by the consumer,” Terry said.
Byrne says some restaurants are adjusting menu items and hours of operations just to stay afloat, causing consumers to think twice about how and where they spend their money to eat - if they’re spending it at all.
“A lot of restaurants have even closed for lunch just because there are not a lot of people out there,” Bryne said. “The customer has to be patient and understand that the rules are changing, it’s a moving target, and the restaurant tour has to pick and choose when they can serve and what they can serve and what kind of staff they have, and it’s all a challenge.”
In the meantime, Byrne says the best thing customers need can do is adjust their expectations to avoid sticker shock as restaurants adjust their prices.
“With reality changing, our expectations have to change,” Byrne said. “We don’t control the cost of commodities. It depends on when it gets here, and if it takes longer, that means you’ll have to pay more for it.”
This is coming at a time when area restaurants are getting hit with their lowest business of the season, from now until Labor Day. This results from more people traveling out of town to eat while on vacation.
Copyright 2022 WWBT. All rights reserved.
Want NBC12’s top stories in your inbox each morning? Subscribe here.