Inflation and high gasoline prices have forced restaurant owners to raise menu prices in order to survive and continue operating.
“The prices of our supplies began to rise up from November. Everything started to get more difficult. We kept the same price on our dishes last year, but this year we can’t take it anymore and we raised a 15% to the menu”, said Valentín Granja, owner of the restaurant Sabores Oaxaqueños, located in the Koreatown neighborhood of Los Angeles.
Granja explained that before this economic crisis broke out, his monthly order, just for containers, napkins and material that does not spoil, came to $2,000.
“Today that same order costs me $4,”.
He said that the costs have gone through the roof.
“Avocados, lemons, everything is twice what it used to cost, and now with the gasoline problem, it’s worse. Prices went up”.
The restaurateur admitted that he was very resistant to increasing the prices for the customer, but they had no other recourse in the face of escalating increases.
Furthermore, it revealed that they now charge for home delivery of food, a service that they previously provided free of charge.
“With the increase in gasoline, it was no longer convenient for us to deliver the orders. We had to include an additional charge”.
And I note that so far the increase in prices on the menu has not caused that the clientele is absent. “Our customers have continued to favor us with their attendance at the restaurant. We have also kept the size of the portions and a template of 21 workers”.
But that does not mean that they are very concerned about gasoline prices and the fear that the prices of their inputs will skyrocket even more.
Unprecedented increases
A report from the Bureau of Labor Statistics showed that menu prices in the country’s restaurants increased 6.4% in January, at the highest level of the last 21 years.
Businesses like Starbucks and McDonald’s raised their prices 8% over the past year, but full-service restaurants increased 7.1% in the 2020.
In general, prices in supermarkets increased up to 7.4% last year.
When restaurant owners increase their prices, it is because their own costs have increased.
Last year they rose above 13% and wages increased 10% to attract more workers amid labor shortages.
Shortage of supplies
Vicente Ortiz, chef and owner of the restaurant El Pescador and Tacos Don Chente, said that the prices of vegetables and meat have doubled.
“We have seen price increases since we began to emerge from the pandemic, and when the shortage of many things came.”
He cited the lemon case as an example of scarcity.
“Last week a box of green lemon was at $70. So we better buy the yellow lemon that is a little less expensive”.
To counteract the impact of the wave of increases, he said that they have chosen to promote dishes made with chicken or pork. because it is cheaper than beef or seafood.
“Before, the merchandise was not brought by the suppliers to the restaurant . Now we are going to find where it is cheaper. We go to Costco, to the Central de Abastos, to the Depot Restaurant.”
He said that the shortage of supplies that contributes to price increases has also been seen in products such as tequila.
“It has been very scarce. Even some brands like Don Julio and Don Julio 70 we did not find them. I don’t know if production fell due to the pandemic”.
As a consequence, he said that they had no other alternative than to increase a little their prices, “although not in the proportion that our goods and supplies have risen; and we believe that it is better to increase the cost than to maintain it, but serving reduced portions.”
However, he recognized that they are reaching the limit.
“I don’t think we will return to normal this year because we estimate that the price of gasoline will take time to go down”.
Ortiz also considered that the increase in wages has contributed to inflation.
“Thank God, in spite of everything, people are returning to eat to restaurants. We have back to 38% of customers compared to how we were before the pandemic. And we are working with fewer employees than we had”.
They work to survive
Marcos Uriarte, owner with his children of the restaurant Emporio Sushi & Seafood with establishments in Downey, Fontana and Orange, said that the situation is cause for concern, but they also need to remain calm and try to be positive like when the pandemic started.
“Currently we are only taking out to survive, because attendance at restaurants has dropped a 10%. We have local clients and those who come from San Diego, but the latter are not going to come as often anymore due to the price of gasoline ”.
And precisely in an effort to keep their restaurants open while waiting for better times, he said that they were forced to increase their prices a little.
The restaurateur added that without a doubt the increase in wages has also affected them.
“What we are experiencing is not easy. Possibly lower gasoline and that will help us. But for now we are not making profits, just subsisting”.
Risk closing rate
It is calculated that 70,000 restaurants and bars have closed since the start of the pandemic, and at least 200, on the entire country remain at risk of permanent closure, according to the Independent Restaurant Coalition (IRC).
A report from the Bureau of Labor Statistics ( BLS) found that employment in restaurants and bars is below the 720, workers based on pre-pandemic levels.
Erika Polmar, director of the In dependent Restaurant Coalition, said almost 200,03 restaurants and their employees are waiting to receive subsidies from the Revitalization Fund, but are up against the clock with two years of debt, multiple waves of covid and record food prices.
“The independent restaurant and bar community are increasingly desperate and frustrated that their elected officials have failed to help them.”
This week, more than 13,000 restaurant owners, suppliers, diners and workers sent a letter to the Biden administration, asking him to refinance them through the Fund of Revitalization for Restaurants.
In the letter, they emphasize that this program failed to support two-thirds of the eligible businesses that applied for the subsidy.
“Almost 113,000 small businesses have been ignored and now 4 out of 5 of those restaurants and bars are in danger of closing permanently”, they say in the letter to Biden.
According to the jobs report February, even though the restaurant and bar industry is suffering, it is clear that an effort has been made to increase wages.
Last year, wages increased nationally, by an average of 15.4% per week.
