July 21, 2024


The Food community

Restaurants hope inflation, supply chains don’t dent Super Bowl boost | News

6 min read

Bars and restaurants hope inflation and supply chain shortages don’t result in fumbles and missed revenue opportunities on one of their busiest days of the year – Super Bowl Sunday.

The big National Football League game on Sunday, Feb. 13, is big business for sports bars, restaurants, carry-outs and grocery stores.

Americans are projected to spend $14.6 billion for the upcoming Super Bowl, or $78.92 per person, according to the National Retail Federation. A survey from the group found 90 million Americans plan to attend a Super Bowl party, up from 62.8 million last year, and 13.7 million people plan to watch the game at a restaurant or bar.

But higher prices for chicken wings and popular seafood items, as well as supply chain shortages for everything from enchilada sauce and cream cheese to imported beers and popular liquor brands, are problematic for restaurants, bars and grocery stores as they prepare for Super Bowl Sunday.

Wholesale prices for chicken wings, a staple item for football fans, have doubled – and, in some instances, tripled, according to bars and restaurants across the country.

Mike Quillen, president of Gecko’s Hospitality Group, which operates three seafood restaurants and six sports bars in southwest Florida, said he is spending $500,000 more on wings than before the coronavirus pandemic.

“We are basically just taking a bath on it,” said Quillen of wholesale wing prices doubling. “That’s insanity.”

Quillen attributes part of the rise in poultry to fast food restaurants (including McDonald’s) and other national chains adding wings and more chicken items to their menus.

“I saw this coming more than a year ago,” Quillen said.

The Florida restaurateur is not alone in being challenged by higher wing prices.

“It hasn’t been hard to get chicken wings, but they’ve been insanely expensive. They have more than doubled in price since ‘before COVID,’ or before all the chickens froze to death in Texas with that bad storm they had. We were once paying $70 for a case, and we were up to $180 for a while. It has gone down a bit since, but it’s still insanely high,” said Ryan Steny, owner of Steny’s Tavern, a Wisconsin eatery in Milwaukee. “The worst part is most of the customers don’t understand and get so upset.”

Like a number of other restaurants, Steny is charging market prices for wings, to accommodate the higher and fluctuating prices. He’s charging $10 for six wings. He used to charge under $1 per wing.

In Florida, some restaurants are charging $18 for 10 wings under market prices. In Tennessee, 20 wings can cost as much as $26. In New York City, a dozen wings are running $21.95.

Chicken wing prices are also up at grocery stores, with retail prices ranging between $3 and $6 per pound in the leadup to the big game.

Back in Wisconsin, higher wing prices resulted in Steny temporarily nixing a weekly Thursday wing night, as well as frustrated customers and lower tips.

“We had to get rid of wing nights, and now it’s one of the slowest nights of the week for us. I used to schedule seven to eight servers on Thursdays, and now I can get away with three,” he said.

He is bringing wing night back to bolster sales.

Menu changes, seafood challenges

Restaurants also have to weigh the costs and logistics of changing and increasing prices and whether and how to adjust menus. Changing printed menus can also be costly, according to restaurant operators.

“As a restaurant, when you have a permanent menu that has prices, we can’t just go changing prices on the fly as the market changes,” said Doug Baker, co-owner of the Brixx Craft House in Boise, Idaho.

Baker said inflationary price shifts are resulting in some restaurants going from printed menus to QR codes so they can pull up menus and websites on their smartphones. The Boise restaurant and bar is still pondering going to an online or QR code-based menu, he said.

Other eateries are having to decide whether to ditch items altogether from menus because of price hikes and shortages.

The National Chicken Council, an industry group representing poultry farmers, said Americans will consume 1.42 billion wings during the game between the Cincinnati Bengals and Los Angeles Rams. The demand for wings has been on the rise in recent years. The same NCC report pegged Super Bowl wing demand at 1.3 billion in 2016.

“Demand for chicken wings has been through the roof since the beginning of the pandemic,” said Tom Super, senior vice president for the chicken group. “A shift from sit-down restaurants to takeout and quick service has boosted chicken wing consumption. Restaurants like wing joints and pizza places were built around takeout and delivery, and as long as people are sitting around watching TV, and maybe drinking a beer, wings will remain in the game.”

Chicken wings are not the only popular menu items challenging restaurant operators and bar keeps with higher prices.

Food prices were up 6.3% in the U.S. in 2021, with overall inflation up 7% – the biggest increase since 1982, according to the U.S Bureau of Labor Statistics.

Seafood prices – for items such as lobster, scallops and grouper (a white-fish favorite in Florida) – are also up significantly. Some items, including imported beers, popular liquor brands and even enchilada sauces, are also facing supply chain challenges.

The market prices for grouper sandwiches and entrees at Florida restaurants are in the $20 to $29 range (up substantially from pre-pandemic levels).

“Scallops are getting very, very tight right now,” said Quillen, who has also seen shortage of lobster and other items during the pandemic. “Crab meat – I probably haven’t had that for six months.”

He’s also seen a perplexing shortage of enchilada sauce that has stretched for several months. “We eventually reverted to making our own. A lot of things don’t make sense,” he said.

Other restaurants are also still struggling to get in cream cheese used for appetizers and other recipes – including crab rangoons, jalapeno poppers and queso dips. Those are also all popular Super Bowl items.

Recent cream cheese shortages stemmed from a cyberattack and ransomware scheme launched against a major supplier in Wisconsin. Bars have also been challenged to stock some popular imported beer and liquor brands.

Economic and social snow globe

Supply chain and inflationary problems can stem from everything from the products themselves and their packaging and labeling to shortages of workers to get them from farms and ports to restaurants, grocery stores and consumers, said Victor Claar, an economist with Florida Gulf Coast University.

COVID-related port shutdowns in Asia have also impacted some products’ supplies and prices. There have been shortages of truckers and port workers, as well as restaurant and bar employees.

Help wanted signs also hang at bars, restaurants and grocery stores across the country as the seismic shifts of the pandemic impact labor pools.

In 2021, 68.3 million American workers left their jobs, with 47.4 million employees quitting their positions, according to BLS.

The number of job quits was an all-time record, including 8.8 million workers voluntarily leaving their positions in the last two months of 2021.

According to federal employment data, 1.87 million restaurant, bar and other hospitality workers and 2 million retail, wholesale and logistics employees ditched their jobs in November and December.

That leaves businesses struggling to staff up and serve customers up and down the economic chain.

The leisure and hospitality industry is down 1.8 million jobs (or 10.3%) from before the pandemic hit in 2020, despite adding 151,000 jobs in January, according to BLS.

Claar said workers are still processing the lost jobs, employment, economic and social disruptions of the COVID pandemic. An estimated 20.5 million jobs were cut in the U.S. at the start of the pandemic 2020.

Many of those jobs were at restaurants, bars, retail stores and hotels. Those same jobs often have lower pay, require holiday and weekend hours and lack benefits. While white-collar and technology workers have been able to work at home during the pandemic, blue-collar and service workers lost jobs pay, and have had to still go into work while navigating school and daycare closures and quarantines.

Claar said the upheavals have left workers – across industries – rethinking their employment paths and job stresses.

“The pandemic was so disruptive back in March of 2020. It is sort of like we took the entire economy and shook it up like a snow globe,” Claar said. “It gave people time to reconsider things like their work-life balance and spending time with their kids in ways they have not before.”

The economist also expects to see plenty of people venturing out to sports bars and Super Bowl parties, even with the latest fears and admonitions in some parts of the country over the omicron variant.

“It seems like people are trying to get along with their lives, and, in some cases, they may throw a Super Bowl party. People are a little more eager to go out to eat and interact with others,” Claar said.

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