Restaurant industry grapples with inflation costs
RICHMOND, Va. (WWBT) — As inflation continues to drive up the prices people pay at the grocery store or gas station, the restaurant industry is also feeling the pinch of rising costs on their menus.
Eric Terry, president of the Virginia Restaurant, Lodging and Travel Association, said he’s seen some restaurants in Virginia raise their menu prices or add extra charges to help deal with skyrocketing expenses.
“We keep seeing that, and in some cases restaurants have to add surcharges, and things like that just to close the gap in their profitability,” Terry told NBC12. “Labour costs, supply costs, food, all those sorts of things have gone up dramatically for restaurants.”
This comes as the latest consumer price index shows inflation at 9.1%. Terry also adds that the most recent data he’s seen from the National Travel Association shows menu prices were up about 12% year-over-year in May.
“I think it’s an unprecedented price increase that we’re seeing,” Terry said. I don’t think there’s been a year that I can see who’s come close to that increase. Their costs, in many cases, have doubled for some foods, so they’ve had to pass some of that on to the consumer, and it’s getting to the point where consumers are starting to change their behavior a bit.
Since the pandemic began, Terry said Virginia has lost about 20% of its restaurants due to the strain on businesses. As inflation continues to weigh heavily on the minds of consumers and business owners, Terry fears it could lead to more businesses closing for good.
“We’ve seen two restaurants that have been around for 60 and 70 years closing their doors and I’m afraid we’ll see more of that as people really try to survive this and realize it’s not that profitable,” Terry said. .
The effects of inflation are being felt in the dining room of the Carytown Pancakes.
“The impact of releases after COVID really helped us a lot because everyone wanted to release again, but inflation really went down in sales and in people,” said Kevin Vivas, the owners’ son. “We have stopped having people from outside Richmond and we only have regular customers. He touched a lot. It was difficult for the restaurant.
Vivas said Les Crepes Carytown has not had to raise prices, but they are monitoring the impacts of inflation and focusing on what is best for their business and their customers.
“We’re just keeping the same mannerisms as we have been since the start of the year,” Vivas said. “Offering the best service, the best food and giving all of 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 due out in August.
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