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Local restaurants may raise prices to make up for supply and labor shortages

The Budget Cafe
Posted at 5:19 PM, Jun 05, 2021
and last updated 2021-06-06 02:39:52-04

With San Luis Obispo’s restaurant scene coming back after COVID-19, restaurant owners are now facing new problems: rising food costs and the high cost of labor.

Data from the U.S. Department of Labor shows prices of all products jumped 4.2.% over the past 12 months, which is the largest increase since 2008. The reason? During the pandemic, suppliers shrunk operations after many restaurants closed.

“Bacon is my business and bacon has really shot up. It’s gone up over a dollar a pound,” owner of The Budget Cafe Rhonda Mayeda said.

Now that Central Coast businesses have been reopening, restaurateurs are facing a nationwide shortage of meat, poultry, fats and oils.

“Beef always goes up in the summer, but it’s gone up faster and higher than it’s ever gone up,” co-owner of Spirit of San Luis Restaurant Mike Stanton said.

The USDA is predicting an increase in both food prices at grocery stores and restaurants over the next year. Some restaurants are considering raising prices to make up for the inflated cost of food.

“We’re averaging about 30-35% increase in our food costs and we did a 5% increase in the cost of the sandwiches,” co-owner of The Broad Street Giant Grinder Marty Budinger said.

Some restaurant owners said they’re trying to keep the price of menu items the same in order to keep their loyal customers.

“I don’t want to raise prices. I don’t want to discourage people from coming, but pricing is too high, so I’m trying to hang on a little bit,” Mayeda said.

Employers are also struggling to fill vacant positions after a historic unemployment rates caused by the pandemic.

“I’ve been 35 years in the restaurant business and I’ve never ever had trouble hiring like we have now,” Stanton said.

Restaurant owners said they’re even considering offering hiring bonuses because they’ve been short-staffed for months.

“To stay open, we’re not open as many hours we used to be. I can’t staff enough shifts right now,” Stanton said.

According to economists, it could take months before prices could drop back down, but restaurant owners are hopeful food prices will get back to normal in the near future.