There’s something new on the menu for food outlets across the US: higher restaurant prices. Americans raring to go out and eat should prepare themselves for the same dining experience they used to enjoy before the pandemic.
However, they should also expect to pay more for the same items.
Restaurant Prices To Go Up As Food Prices Go Up
Many shop owners are saying that their restaurant prices are going up thanks to rising costs in food, packaging, and supplies.
In addition, labor shortages are forcing them to pay more for staffing. “If we’re getting squeezed there are only two ways to handle it, either cut costs or raise prices, there are no alternatives really,” said Hakan Swahn.
Swahn is the owner of Midtown’s Aquavit, a Nordic cuisine outlet in New York. He said he’s spending about 15 percent more on supplies. Consequently, this meant customers’ checks average between 15 to 20 percent higher.
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Meanwhile, even packaging costs are rising. Ciro Casella, co-owner of San Matteo Pizzeria on the Upper East Side, said that everything’s prices went sky high.
“Even pizza boxes, they raised (prices) like crazy. I used to pay $12.95 for a bundle. Now it went to $17.95,” he said. He added that delivery prices and food supplies went up.
Olive oil, Mozzarella cheese, and tomatoes all went upwards of around 30%. Casella said that if prices don’t go down in a few months, he’ll have to raise the menu prices.”
US Labor Department data reports that prices across all products jumped an average of 4.2% over the past 12 months.
This is the largest increase since 2008, and a number of issues are driving up the prices. Consequently, the pandemic slowed demand for outdoor dining, forcing many restaurant operators to close.
Now, with the economy opening up, the surge of diners wanting to eat out generated overwhelming demand. To stay afloat, many owners had to raise their restaurant prices.
Alan Natkiel, the owner of Georgia’s Northside restaurant in New Hampshire, said his grocery bills are 25% higher than average.
He made the decision to announce his price increases on Facebook for transparency. This also included updates that brisket prices went up 185% for brisket, 70% for chicken breast, 100% for fryer oil, and 300% for glove prices.
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“People see an increase in prices of meat at the grocery store, but, by and large, they don’t see oil prices, they don’t see glove prices and no one wants to hear [that] your burger is an extra dollar because gloves cost more money,” he said.
In addition, the lack of available workers to meet demand is making matters worse. Many blamed a severe labor shortage for the rise in restaurant prices.
As a result, this drove wage inflation that pushed salary rates higher. Craig Dunaway, president of the Ohio-based Penn Station East Coast Subs franchise, says that wage inflation is a crisis right now.
Penn Station in particular, which operates 300 locations in 15 states, is struggling to hire new workers. As a result, the chain raised prices effective May 1.
Dunaway says the problem isn’t exclusive to Penn Station. “It’s not like we’re at a competitive disadvantage. Everybody’s experiencing it. Our suppliers are experiencing it, too. They also have fewer employees,” he noted.
Watch the Uneducated Economist as he discusses that restaurants could be going into crisis because of labor and supply shortages:
Have you experienced dining out again? Also, did you come across higher restaurant prices when you went out to eat?
Tell us what you think about higher restaurant prices and their effect on your budget. Share your comments below.