Central Pa. restaurants raising prices ‘to keep the doors open’

The last thing Andre Young wanted to do is raise prices at his Harrisburg soul food restaurant.

Unfortunately, the owner of Soul House Cafe along Paxton Street had no choice. Recently on Facebook, Young announced minor price hikes on the menu as commodities nationwide are getting more expensive.

“It’s a challenge, it really, really is,” he said. “I held out as long as I could without raising my prices and I had to to keep the doors open.”

Across central Pennsylvania, many restaurant owners are making the difficult decision to adjust prices or watch profit margins suffer.

More than 18 months into the pandemic after surviving government mandates and labor shortages, the restaurant industry is facing another hurdle - higher food prices. As a result, owners are raising prices, eliminating some menu items and finding alternative products.

According to the Pennsylvania Restaurant & Lodging Association, about 92% of operators in the state say total food costs are higher than they were prior to the coronavirus pandemic. Meanwhile, about 90% of operators surveyed said profit margins are down since the start of the COVID-19 outbreak.

At the same time, diners are paying more to eat out. Data from the Bureau of Labor Statistics shows prices increased 0.8% from June to July this year, one of the sharpest increases since February 1981, according to Restaurant Business Online.

Well-known national chains have not been immune. Business Insider shared results from an analysis by Gordon Haskett Research Advisors of 24 restaurant menus showing prices rose 10% at Taco Bell, 8% at McDonald’s and 8% at Dunkin’, followed by Chipotle and The Cheesecake Factory.

Those in the industry say the price hikes are largely being driven by a combination of labor shortages and supply chain disruptions. Transportation costs are higher due to shortages of truck drivers, while food processing plants are struggling to find enough workers.

“Inflation is real and it’s happening,” said Joey Devor, owner of Joey’s Chicken Shack in Lower Allen Township. “It’s not a matter if it’s real, it’s happening now.”

Every month since July, Devor said he has readjusted prices on the mostly chicken menu. He first noticed the price hikes last winter when chicken wing prices hit record highs. Fryer grease followed. Devor is paying an additional $1,600 a month for the oil.

“We hit a point where I said we’ve got to raise pricing. We don’t have any other option,” he said.

READ MORE:

• Central Pa. restaurants hit with ‘worse staffing’ issues even after extra unemployment benefits ended
• With a potential toy shortage looming, should you buy early for the holidays?

Along with chicken, seafood, including fish and crab, have been hit hard.

Soul House’s Young said he bumped crab off the menu when the price of a 12-can case doubled from $150 to $325. He has also witnessed chicken, cooking oil and beef prices skyrocket.

Challenges may last a while

Owners like Jennifer Stretch of Joe Mama’s Kitchen in Harrisburg said she could only shield customers from rising prices for so long. This week, she adjusted the cost of a fish sandwich from $5 to $7 after realizing she was paying twice as much for fish.

Stretch said she has had to shuffle which food suppliers she uses since some companies have stopped delivery due to a shortage of employees. She has resorted to picking up supplies at places such as Sam’s Club, The Restaurant Store and John Gross & Co. in Mechanicsburg.

One of the hardest items for operators to find are takeout containers, something Stretch said she needs since carryout business has jumped from 10% to 90% during the pandemic. She’s now ordering the containers online.

“I think it’s a warehouse production issue. I think the warehouses are so understaffed they can’t keep up and takeout has increased during the pandemic,” she said.

Unfortunately, Stretch said doesn’t expect to see improvements soon.

“I don’t think things will be better for a few more years. I think I just take some time to work itself out,” she said.

Vendors have told Joe Ressler, owner of Ressler’s Bagel & Deli in Lower Allen Township, to expect supply chain issues and higher prices well into 2022.

In preparation, Ressler said he’s stocking up on ingredients such as pretzel salt, sesame seeds and poppyseeds used to make bagels. He’s also paying more for ingredients such as Boar’s Head deli meats, while prices of 50-pound bags of flour have increased by $6 to $7 in the past three months.

“I have not raised prices yet but it is going to be coming,” Ressler said.

‘A very peculiar situation’

So far, owners say customers have been understanding about paying more.

“By now, they have felt it at the grocery store,” Young said. “It’s just drastic increases happening for two and a half, three months now so people are understanding.”

He’s trying to offset higher prices by running specials on foods that aren’t as impacted and stressed not using cheaper ingredients and allowing quality to suffer.

Devor said he hasn’t received a lot of complaints, although he admitted customers voiced sticker shock back in the winter about chicken wing prices. Now, as price hikes continue, Devor said he thinks people are starting to cut back on the frequency of restaurant visits to save money.

“It’s a very peculiar situation we are in,” he said. “If society doesn’t adjust, the independent restauranteur is going to be obsolete because we just can’t afford to operate.”

READ MORE:

• 9 more foodie towns to visit in Pennsylvania in time for fall road trips
• Cumberland County, Pa.’s fastest-growing county, gains in diversity: ‘Different voices need to be heard’