Sampling of price increases
Cod starter: $ 22 was $ 20
Brandt Farms Flatiron steak: $ 23.50, the three-tip steak was $ 20
George’s Ocean Terrace (lunch)
Fish tacos: $ 13, $ 12
Niman Ranch burger with cheddar and bacon: $ 15, was $ 14
Sammy’s wood-fired pizza
Half-chopped pepperoni salad: $ 10.50, was $ 9.95
Chicken Garlic Pizza: $ 12.50, was $ 11.95
Jack in the box
Entrance salads: $ 5.19, were $ 4.99 (at most company-owned restaurants)
Jumbo Offer: Jumbo Jack, 2 tacos, small fries, small drink, $ 4.29, was $ 3.99
Anyone who even takes the occasional trip to the grocery store – and doesn’t – has likely experienced sticker shock as food prices have been on a steady and relentless slope. But consider the enigma of restaurateurs who also have to absorb the rising costs but are reluctant to pass them for fear of losing their most precious asset: their customers.
As restaurant food makes a comeback in a still fragile economic recovery, local restaurateurs big and small say they are still meticulous about cutting costs wherever they can, only resorting to increases. menu prices as a last resort.
This self-control is gradually coming to an end.
San Diego County restaurants, from fast food outlets to upscale dining destinations, are modestly raising prices to stay profitable but, they hope, aren’t alienating price-conscious diners. To avoid even higher menu prices, restaurateurs in some cases opt for less expensive seafood or cuts of beef, offering slightly smaller portions and, as always, haggling with vendors for the best deal possible.
However, some price increases are inevitable, according to operators. Jack in the Box, for example, has increased the price of its Jumbo offer by a quarter. Sammy’s Woodfired Pizza has chosen to increase the price of its chicken garlic pizza by 55 cents, and Cucina Urbana, who has long lived by the maxim “nothing more than $ 20”, now has a flat iron steak. on the menu for $ 23.50.
They all point out, however, that their increases do not come close to matching the corresponding increases in food costs, and that they have no intention of sacrificing their commitment to quality.
“The worst thing you want to do as a restaurant owner is to raise the prices. You can’t settle for a $ 20 pizza, for god’s sake, ”said Sami Ladeki, founder of Sammy’s.
Reluctantly, Ladeki Restaurant Group, which has 17 Sammy’s locations and two more to open this spring, began modestly raising prices about six months ago.
“For two years, I did not increase any prices. This year we started a new menu and I made more salads and the protein free ones and you can sell it a lot cheaper so you have to be very creative. And we have a high volume, so we buy the food from the big companies, which gives us more advantage over the small operations. “
According to the most recent figures from the Bureau of Labor Statistics, wholesale food prices rose 6.1% in December from the previous year – the largest increase since 2007. Some of the most notable increases are in the beef and veal, which climbed 16.1%; dairy products, which increased by 12%; and pasta, 19.3 percent.
And there does not appear to be a slowdown in food inflation. Fitch Ratings, a global rating company, predicts that restaurant food and beverage costs will rise 5% this year, for the second year in a row.
After having stayed the course on menu prices for a while, the big chains are no longer holding back. Denny’s announced this month that it was considering price hikes, following Starbucks’ announcement of plans to raise prices for brewed coffee.
“The consensus is that we are in an era of high, volatile and rising food costs, and we are unlikely to see a significant drop in any of the major categories that are so critical to operators, such as protein. , dairy products and grains, ”said industry analyst Bob Goldin of Technomic, a research and consulting firm. “Operators are very reluctant to increase menu prices in this kind of economic climate, but they do so out of economic necessity.”
Fast food industry
Burger chains, he noted, need to be even more careful than other restaurant niches when deciding to raise prices, given the stiff competition in the fast food industry. They are more likely to keep their cheapest value items roughly constant while increasing the prices of high-end sandwiches and bundling a number of menu items into selected promotions, he said.
San Diego-based Jack in the Box has increased prices on average nearly 2% in the most recent fiscal year ended Oct. 2, and expects its own beef costs to climb as much as 10%. But that won’t stop the chain from offering special hamburger promotions this year, spokesman Brian Luscomb said.
“Rather than slashing the price of a signature menu item and denigrating the perceived value of that product, we deliver (offers) by bundling together many of our customer’s favorites that are significantly lower than a la carte prices, and which drive traffic to our restaurants, ”he said.
Beyond the price hike, restaurateurs, Goldin noted, are trying other strategies to deal with higher costs, such as making dishes with breadings, sauces and starches to satiate diners and rethink. menus by favoring more affordable cuts of beef.
Mark Kropczynski, executive chef of the US Grant Hotel in downtown San Diego, insists the luxury property has not raised prices in the face of skyrocketing costs for certain items like fish costs. While some beef dishes on the dining room menu can be relatively high, Kropczynski says he balances the rib eye steak at $ 45, for example, with braised pork cheeks at $ 26.
“If we were to increase the prices of beef and fish to current market prices, no one would come here,” he said. “We have also been very careful with waste monitoring. I can cut all my meat and use all the beef trim to feed my employees ground beef.
Brandt Beef, a local beef supplier who runs a cattle ranch in Brawley that has seen livestock costs skyrocket 30 percent, acknowledges some haggling from his restaurant clients, but managing partner Eric Brandt prefers working with operators to find ways to satisfy their need to contain rising costs and its goal of remaining profitable. He will suggest owners consider equally attractive but cheaper cuts of meat like ribs or serve 12 ounce steaks instead of 16 ounces. It also suggests less frequent deliveries to reduce escalating fuel costs.
“We could lower the price, but we’ll ask, ‘Can you add this cut to your menu to make up for it for us? ”Said Brandt, whose company supplies about 400 local restaurants. “We need the restaurants that use our meat to make money, so charging them more won’t work. “