Dear restaurateurs, I am writing this letter out of love and support. Restaurant menu prices are reaching an unsustainable level which is the start of a very unpleasant cycle.
During the pandemic, I think many have been very forgiving and willing to do what we can to support our local restaurant owners and workers. I also know that we are now in the twilight of COVID “revenge spending” — traveling and going out to dinner at our favorite restaurants. This is changing — people now need to “normalize” their spending.
I have personally experienced sticker shock several times. The main courses in the restaurant went through the mid-thirties, reaching the forties in my “old haunts” restaurants. A favorite simple pasta dish that used to cost around $20 is now $30. Appetizer prices have gone up. Two weeks ago I purchased my second and final $25 all-inclusive pastrami sandwich. It’s tasty, but $25 for a skinny sandwich by New York standards is just more than I’m willing to shell out in the future.
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I want to be clear, this is not a criticism. This is a saving statement. All of us local “workers” in the valley have what we have in income meaning we have a certain amount that we are willing to spend on entertainment/dining out especially when our gas cost , home energy and basic groceries is going up. And, again, our income hasn’t really increased that much. In other words, the money that the average local (“blue” and “white collar”) is able to spend in local restaurants is reduced. And I still believe that locals are the main source of income for restaurants in the Valley. Visitors are “sauce” for most establishments – and they happen to write reviews about their restaurant experience and spending.
Personally, I dine out less often and cook more meals at home. I’m now more aware of where I’m going ahead of time based on menu prices, and I’m more likely to gravitate to the “lite faire” or “appetizer” portion of the menu. I lower the “average” of my check in reaction to menu inflation.
I know your labor cost is going up because we live in California and the demand for restaurant workers. I know your food expenses have increased. Unfortunately, the idea of just passing those costs on to customers just doesn’t work, not because we don’t like you, but because we just can’t afford to keep shelling out.
And by the way, it continues to amaze me that the service staff and the “front of house” didn’t really understand that providing excellent service quickly would make more money for the servers and the restaurant. So if I was a restaurant manager, I would focus on my wait staff and show them how they earn more if they provide great service and turn more tables each night. It drives me crazy that I wait up to five minutes for a drink order and then another five minutes later for an appetizer order – but wait, no meal order. Basic restaurant math is that this delay in simply getting drinks and food to customers quickly kills your turns and your gross income.
My advice is to “look into” this current discretionary income squeeze that will affect your businesses. Work with your suppliers and consider switching suppliers to reduce your food costs. Spoiler alert – most people really don’t care about the sweet story of the artisanal origins of your products or proteins (it was the ‘rage’ 10 years ago when money was lost) – they just want a good tasty meal (especially your skill in the kitchen) at a reasonable price! As a business, you need to impose cost discipline on your suppliers. People can support artisan producers at their farmers market.
Instead of trying to be in the business of cost pass-through, look to find ways to create value propositions for people who face lower discretionary income. You know your business and your food costs and how it all works in the wash as you move entrees and select lunch and dinner items by volume. How to generate more business on reasonably priced items and promotions – this will be key to your success in the immediate future.
I affectionately wish you good luck in your endeavour.