Restaurants raise prices amid soaring costs, labor shortage

Robert C. Williams

Americans returning to restaurants might notice something different: a bigger bill. 

Rising costs of ingredients and basic supplies as well as a nationwide labor shortage are throttling restaurants just as they begin to fully reopen and ramp up for a bustling summer season. 

Alan Natkiel, the owner of Georgia’s Northside in Concord, New Hampshire, took to Facebook to plead with customers to understand. 

“Due to the surging costs.. I hate saying what I’m about to say but here it is-  I will be raising prices on select items to offset my increased wholesale costs,” he wrote in a post. “When supply chain issues and availability come back around, I pledge to adjust my prices accordingly in order to maintain a menu that is fresh, dynamic, and very importantly to me: affordable to the Concord community.”

The price of St. Louis Ribs, for example, is up 50 percent over the past three months, he said, and fryer oil prices have almost doubled while food service gloves have tripled in cost. 

Alan Natkiel, owner of New Hampshire restaurant Georgia's Northside, informed guests on Facebook that menu price items may be going up.
Alan Natkiel, owner of New Hampshire restaurant Georgia’s Northside, informed guests on Facebook that menu price items may be going up.
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Natkiel added that he’s not currently selling chicken wings due to a national shortage that’s driven the price up. 

Prices across all products jumped 4.2 percent over the past year — the largest increase since 2008, according to the Labor Department. As the economy comes roaring back to life, an imbalance between demand for goods and companies’ ability to supply products has sent prices up, and now it’s hitting small restaurateurs just as many are welcoming back customers after over a year of pandemic-constrained operations.

Brian Mooney, the owner-chef of to-go seafood joint Hooked in Montauk, New York, said costs of everything are rising, squeezing the small five-employee business’ ability to turn a profit. He added that he’s had to raise pay about 15 percent to retain employees and try to attract a couple more workers to help with surging demand. 

Prices across all products jumped 4.2 percent over the past year.
Prices across all products jumped 4.2 percent over the past year.
Noam Galai/Getty Images

“Pay is up. Food prices are up. Glove costs are up. The cost of everything is up,” he told The Post. 

Kenan Porter, owner of Middletown, NY-based Clemson Bros. Brewery, noted that costs of beer ingredients are up, too. During normal times, he said, costs take between 18 percent and 22 percent of sales. Right now, they’re at 25 percent, he said. 

“That translates to a nice chunk of money at the end of each month,” he told The Post.

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Receipts posted by Alan Natkiel, owner of New Hampshire restaurant Georgia’s Northside, showing the rising price of wholesale products.

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The increased prices shown at Alan Natkiel’s eatery.

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Clemson Bros. has yet to raise prices “like other people are doing,” Porter said, because he doesn’t want to diminish the crowds the business is seeing now. But if costs remain high, Porter said, he’d have to consider raising prices. 

The inflationary pressures are hitting restaurants all across the country. In Bennington, Nebraska, near Omaha, Warehouse Grille and Drinkery owner Jill Nelson told ABC affiliate KETV that the eatery’s been absorbing rising costs for the past two months. 

Alan Natkiel said some items at his eatery are not being sold due to the raising prices and shortages, such as chicken wings.
Alan Natkiel said some items at his eatery are not being sold due to the rising prices and shortages, such as chicken wings.
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But, she said, the restaurant had to finally raise its menu prices last week, adding $2 on all chicken and beef items and an additional $3 on hand-cut Angus steaks.

“That’s not even getting us close to where we need to be, but it’ll be helpful,” she told the outlet. 

In Michigan, the owner of Char Asian Fusion in Grand Rapids raised the price of its tacos, broth bowls and rice bowls by at least $1 each “due to restaurant inventory price inflation in the present market,” according to local outlet WOOD-TV

“I’m just trying to survive,” Char owner Abdul Qassem said. “I have mouths to feed — my employees, my family.”

Brian Price, head of investment management for Commonwealth Financial Network, told The Post that he’s noticed higher prices at restaurants when he’s eaten out. 

Prices at restaurants may be rising nationwide amid surging wholesale costs.
Prices at restaurants may be rising nationwide amid surging wholesale costs.
Deb Lindsey for The Washington Post via Getty Images

“Some of that may be making up for lost revenue over the last, you know, 15 months or so, but I think it’s more having to do with the fact that they have to pay their staff that much more now,” he said.

He added that prices and wages could remain higher “for some time” and continue to be a major factor in the country’s economic recovery. 

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