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It’s not just food costs. In recent months, fuel costs have skyrocketed, hitting record highs in the US and abroad, causing many food suppliers to add surcharges to restaurants’ delivery bills, charging extra for each delivery. Energy costs in the US, which include fuel, are up a staggering 32 percent from last year.
US President Biden has looked to push at least part of the blame on the war in Ukraine, issuing a statement on the state of inflation that said, in part, “...today’s inflation report is a reminder that Americans‘ budgets are being stretched by price increases and families are starting to feel the impacts of Putin’s price hike."
Restaurants are feeling the heat, even as they work to keep rising costs from affecting their diners’ experiences. The timing couldn’t be worse — higher prices come just as life starts to offer some semblance of pre-pandemic normality.
“We are very affected by inflation due to the increase in the price of utilities, salaries, and ingredients,” says Eric Ripert chef and co-owner of New York’s Le Bernardin, a Michelin three-star restaurant. In one instance, a case of 100 limes that cost $37 in October 2021 now costs $137. Many other common staples have had huge increases, he says.
Ripert has made some adjustments to his pricing, but the restaurant absorbs much of the increased costs. “Guests have not felt the changes,” he says. “We have not let the inflation affect the Le Bernardin experience for our clients.”
In fact, he adds, taking shortcuts and lowering standards would be a huge mistake. “There’s nothing worse than disappointing a client.”
Keeping customers happy can be trickier, though, when the restaurant relies heavily on one ingredient. The USDA expects wholesale beef prices - that is, what restaurants pay - to rise between 4 and 7 percent this year. Clearly, most customers arrive at Harris’ expecting a high-quality steak.
Chef Buhagiar has raised prices slightly — “a few dollars per steak,” he says — but not enough to offset the increased loss the business faces because of inflation. Mostly, diners haven’t noticed, he says, or if they have, they haven’t complained.
A report from Yelp earlier this year found mentions of inflation-related terms on the review site spiked toward the end of 2021 after steadily rising since 2015. At the same time, searches for pricier businesses rose, suggesting increasing prices might not be enough to deter our dining out habits. In fact, according to the National Restaurant Association, half of US restaurant customers surveyed at the end of 2021 said they want to be dining out more, a data point that’s up significantly from pre-pandemic 2019.
It might be too early to tell what restaurants should expect in the short-term; conditions are changing quickly and we’re not yet halfway into the year. Recent reporting from Bloomberg shared its own economists estimated that households in the US will have to spend an extra $5,200 this year - over $400 per month - for the same food and retail items. Still, the economists said, US households have built up over $2 trillion in savings during the pandemic and will likely only lose a quarter of it due to inflation.
The CEO of Beef ‘O’ Brady’s, a restaurant chain in the American Southeast, explained the challenges to Bloomberg. “People are looking for deals,” he said. “They’re getting hammered everywhere, at the gas station, at the grocery store.” The restaurant recently replaced its surf-and-turf dish with a more economical fish-and-chips.
In fact, pared-down menus have become a hallmark of the past few years as a way to combat challenges from supply chain to staffing shortages. Data from BentoBox, a restaurant ordering and technology provider, found that 75 percent of its restaurant partners streamlined menu items in 2021 due to supply chain and inflation issues.
Restaurants report other cost-cutting measures mostly outside of customers’ views: choosing less expensive toilet paper for the restroom, enlisting existing staff to help with dining-room improvements like painting and other small fixes, providing specialty condiments by request only instead of leaving them on the table. Every small change helps, they say.
Some restaurants might avoid a hard hit simply by their own nature. At Rustic Canyon in Los Angeles, executive chef Andy Doubrava says rising costs haven’t affected the business too significantly.
“I think it has a lot to do with us sourcing locally, but we are also very spontaneous with our menu. We might not notice a price change if we’re only using a product for a short while,” he says, though concedes he’ll inevitably need to slightly raise prices of staple items like bread and olives to account for the effects of inflation.
But Doubrava remains committed to offering the best possible experience, no matter what economic forces are at play. “All we can do is watch our costs, make great food and provide some comfort and a momentary escape from reality for our guests,” he said.
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