Restaurant industry grapples with inflation costs
VRLTA reports some restaurants raising prices, adding surcharge fees to cover skyrocketing prices
RICHMOND, Va. (WWBT) - As inflation continues to drive up the prices people are paying at the grocery store or gas station, the restaurant industry is also feeling the pinch of the climbing costs on their menus.
Eric Terry, president of the Virginia Restaurant, Lodging and Travel Association, said he’s seen some restaurants in Virginia increase their menu prices or add a surcharge fee to help with the skyrocketing expenses.
“We’re continuing to see that, and in some cases, restaurants are having to add some surcharges on, and things like that just to kind of close the gap on their profitability,” Terry told NBC12. “The labor costs, supply costs, food, all those sorts of things have increased dramatically for restaurants.”
This comes as the latest Consumer Price Index reports inflation at 9.1 percent. Terry also adds the most recent data he’s seen from the National Travel Association shows menu prices have gone up about 12 percent year to year as of May.
“I think this is an unheard increase in prices that we’re seeing,” Terry said. I don’t think there’s a year that I can see that’s been anywhere near that increase. Their costs, in many cases, have doubled for some certain foods, so they’ve had to pass some of that along to the consumer , and it’s kind of getting to the point where consumers are starting to change their behavior a little bit.”
Since the pandemic’s start, Terry said Virginia lost about 20 percent of its restaurants because of the strain on businesses. As inflation continues to weigh heavily on the minds of consumers and business owners, Terry fears this could lead to more businesses closing up for good.
“We’ve seen two restaurants open 60 and 70 years close their doors and I’m concerned we’re going to see more of that as folks really try to survive this and realize this is not that profitable,” Terry said.
The effects of inflation are being felt in the dining room of Les Crepes Carytown.
“The impact from people going out after COVID really helped us a lot because everyone wanted to go outside again, but the inflation really went down in sales and in people,” said Kevin Vivas, the owners’ son. “We stopped having people from outside of Richmond, and we only have like regular customers. It has hit a lot. It has been difficult for the restaurant.”
Vivas said Les Crepes Carytown hasn’t had to raise their prices, but they’re monitoring the inflation impacts and focusing on what’s best for their business and customers.
“We are just keeping the same ways as we are since the beginning of the year,” Vivas said. “Giving the best service, the best food and giving all our customers the same things for the same prices.”
Terry also told NBC12 that unless we see fundamental changes in the inflation market, this trend will continue to hurt restaurants trying to get back on their feet.
The next Consumer Price Index report is set to be released in August.
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