Restaurant Prices

[PDXTabs]

I am intimately involved in the restaurant industry and many are having to double the pay they were paying.  Nobody's rent ever doubles.

Out of curiosity, are you in a state that has a lower minimum wage for servers? Also, what's the minimum wage? The minimum wage where I live is $14/hr FWIW and the local burger place does not have a starting wage of $28/hr.

[wageslave23]

I am intimately involved in the restaurant industry and many are having to double the pay they were paying.  Nobody's rent ever doubles.

Out of curiosity, are you in a state that has a lower minimum wage for servers? Also, what's the minimum wage? The minimum wage where I live is $14/hr FWIW and the local burger place does not have a starting wage of $28/hr.

It's $7/hr.  So yeah might not apply as much to your state. 

On a side note, being a server in your area sounds like a pretty good gig.  I would love to see restaurants just pay servers what they are worth and get rid of tipping all together.  I don't want to be responsible for a server trying to get by on $15/hr and I also don't want to be contributing to a server making $50/hr. Let servers and restaurant owners come up with an agreed wage.  And then pass the cost on to the customers via menu prices.  All the guess work is taken away.

[SomedayStache]

We're family friends with the owners of a long-time, small, local Diner (it's been featured on Food Network shows more than once) and my husband has pulled line-cook shifts on and off for the last twenty years.

Pre-pandemic
Wait-staff got the federal minimum for tipped wage staff of $2.13/hr but it was a coveted place to work because the hours are good (it closes at 2pm each day) and most wait-staff walked out with $100 a shift after tips.

The cook jobs never paid nearly as well, but experienced line cooks would be paid $10-$11/hr which far exceeds many of the cooking jobs in our area since minimum wage here is $7.25/hr.

Post-pandemic
Our friend now pays waitstaff $10/hr (vs $2.13 a few years ago) and has raised the cook starting pay to $15 - and I know the long-time cook is getting $25/hr. So her labor costs have more than doubled over the last few years.

[PDXTabs]

On a side note, being a server in your area sounds like a pretty good gig.  I would love to see restaurants just pay servers what they are worth and get rid of tipping all together.  I don't want to be responsible for a server trying to get by on $15/hr and I also don't want to be contributing to a server making $50/hr. Let servers and restaurant owners come up with an agreed wage.  And then pass the cost on to the customers via menu prices.  All the guess work is taken away.

I agree on all counts. Pre-pandemic in my experience servers could make 2x minimum wage after tips at a dumb chain restaurant. Of course they still had all the other bullshit like split shifts etc to deal with.

[alsoknownasDean]

Different situation, but it seems like prices have gone up a bit here... or more that there's fewer cheap options.

Although here it seems it's not so much due to minimum wages increasing (already $20 per hour, if they're not just paying cash in hand under the table), but just restaurants/pubs trying to make up for lost income due to lockdowns.

[slackmax]

Prepandemic:  An OK grilled half-pound burger with fries, and a microscopic paper cup of cole slaw was $11.99 plus tax plus trip.

PostPandemic:  Not even going to look. 

[Villanelle]

Drove through a parking lot today that has multiple fast food places in the parking lot.  Looks like Burger King has gone out of business sometime in the last few weeks.   Seemed somewhat relevant to this thread.

[zolotiyeruki]

Drove through a parking lot today that has multiple fast food places in the parking lot.  Looks like Burger King has gone out of business sometime in the last few weeks.   Seemed somewhat relevant to this thread.

There's a Little Caesar's on my way home from work.  It would appear they're closed--nobody picks up the phone, and you can't order through the website.  I'm pretty sure it's due to staffing shortages, since they're several miles from any other LC location, and they've been consistently busy.

[Cranky]

Starbucks is closed more often than not here. Crazy!

[maizefolk]

Some observations:
1. According to a quick internet search ~30% of a typical restaurant's cost is labour and ~30% is rent. If you are terrified of rising wages this year you should also have been terrified of rising rents in years past.
2. Restaurant pay is up in my area, but not up $15/hr.
3. Restaurant prices are up and menu choice is down.

But when I talk to the owners they don't complain about wages, they complain about supply chain problem and reduced capacity. It really is the perfect storm for restaurants right now. Labour is up, supplies are spotty, capacities have been reduced, and half the customers are terrified to patronize the establishment.

I am intimately involved in the restaurant industry and many are having to double the pay they were paying.  Nobody's rent ever doubles.

This may be a geographic issue. Oregon still has a 4.2% unemployment rate which is in the normal range you'd expect for a good economy. There are parts of the midwest with unemployment rates ~2% (particularly college towns) and the labor market starts to get a lot weirder at that point: big increases in pay, reduced hours of operation and/or cut services.

My guess is part of what is exacerbating the perception of food shortages in parts of the USA is that grocery stores have basically stopped facing goods during the day to conserve the limited pool of labor.

[Captain FIRE]

My guess is part of what is exacerbating the perception of food shortages in parts of the USA is that grocery stores have basically stopped facing goods during the day to conserve the limited pool of labor.

What does this mean (facing goods)?

[Cranky]

My guess is part of what is exacerbating the perception of food shortages in parts of the USA is that grocery stores have basically stopped facing goods during the day to conserve the limited pool of labor.

What does this mean (facing goods)?

Stocking shelves, I think.

I dunno. I blamed the empty shelves at Aldi on not going until the end of the sale cycle, but then I switched to Wednesday in the hope that things would be fully stocked. No such luck. I asked an employee and she said stuff just wasn’t coming in on the truck. They didn’t have table salt for over a month.

[maizefolk]

My guess is part of what is exacerbating the perception of food shortages in parts of the USA is that grocery stores have basically stopped facing goods during the day to conserve the limited pool of labor.

What does this mean (facing goods)?

An employee goes down the aisle and pull goods from the back of the shelves so that there is a layer of produce right at the edge of the shelf. It looks more attractive, makes it easier for customers to see at a glance what products are available (and easier for them to pick one up off the shelf), and also creates the illusion of a completely stocked store since any empty space is hidden at the back of the shelves.

Here's more on the concept

It is different from stocking which is bringing out and putting up new goods on the shelves in that you are just rearranging the existing goods on a shelf to make them easier to see, easier to pick up, and look less like the store is half empty (even when it frequently is).

[KarefulKactus15]

I can't speak for all stores but at Publix, the inventory wasn't actually that deep.

Most item were "blocked" (another word for facing) 2 wide and 2 deep, and if cans or another item shorter than 6 inches, 2 high.  So there wasn't actually that much product on shelf.  In fact at the eye level shelves, most shoppers can't actually reach the back of the shelf so you don't keep much there.   And the frozen food section gets absolutely no love at this time.  It's the hardest section to keep orderly looking.

So I agree, lack of midday shelf presentation maintenance is also an issue.

If you notice, Walmart for sure has completely changed their labor model for restocking shelves to the bare minimum.

Used to all the pallets and such came out at night with a small army of stockers.   Now it seems they just roll that shit out to the aisle whenever the truck comes in and a day time stocker will get to it when they have time.

I'd be curious how low they are on stockers atm compared to what they had on a 24/7 shift model. It should technically take the same amount of man hours to stock a 12 hour shift of being open vs 24.  People around the store are still buying the same amount of stuff regardless of the the stores open hours.

[maizefolk]

I'd be curious how low they are on stockers atm compared to what they had on a 24/7 shift model. It should technically take the same amount of man hours to stock a 12 hour shift of being open vs 24.  People around the store are still buying the same amount of stuff regardless of the the stores open hours.

I agree, if sales are constant, it takes the same number of person hours to stock regardless (unlike facing which can be essentially eliminated with the same sales and the shelves just look messier and emptier).

Perhaps it is harder to hire people to work night shifts when there are so many employers completing to hire people even during the day? Or they may be trying to have existing employees in different departments do double duty and send them to stock shelves whenever there is a short lull instead of relying so much on dedicated stockers?

[Captain FIRE]

I'd be curious how low they are on stockers atm compared to what they had on a 24/7 shift model. It should technically take the same amount of man hours to stock a 12 hour shift of being open vs 24.  People around the store are still buying the same amount of stuff regardless of the the stores open hours.

I agree, if sales are constant, it takes the same number of person hours to stock regardless (unlike facing which can be essentially eliminated with the same sales and the shelves just look messier and emptier).

Perhaps it is harder to hire people to work night shifts when there are so many employers completing to hire people even during the day? Or they may be trying to have existing employees in different departments do double duty and send them to stock shelves whenever there is a short lull instead of relying so much on dedicated stockers?

And probably cuts down on lulls in stockers time too.  People are being asked to work harder on all sorts of jobs in this pandemic.  Possibly one of many reasons people are quitting.

[Arbitrage]

My unscientific feeling, supported by a few data points, is that restaurant prices are up about 20% over pre-pandemic.  However, we only go out to eat very rarely, and have also moved.  In general, I find eating at a sit-down restaurant to be crazy expensive and not worth the price premium paid (especially when paying for a family of four). 

I'm ok with doing it as an occasional treat/experience mainly because that's what other people believe constitutes "doing something," and I like to be social with friends. 

[Chris22]

I suspect that the market for takeout has permanently increased - it will remain a less expensive option than running a sit down restaurant.

Except that a lot of restaurants make a lot of their money on alcohol sales, and most people don’t do take out alcohol sales (our locale legalized it, but my wife and I, who are fairly big eat-out people and drinking people, only utilized that once or twice on some specialty cocktails).  You might make a few bucks on a steak or some fish, but if you can make 2-3x on a $50 bottle of wine that’s a big deal you might no longer be getting.

[maizefolk]

My unscientific feeling, supported by a few data points, is that restaurant prices are up about 20% over pre-pandemic.  However, we only go out to eat very rarely, and have also moved.  In general, I find eating at a sit-down restaurant to be crazy expensive and not worth the price premium paid (especially when paying for a family of four). 

I think prices may also have increased more on the low end of food service than the high end.

A cup of black coffee at my local coffee shop is up ~60% from early 2020, plus they eliminated their loyalty program (buy-10-get-one-free so effectively an additional 9% price increase for frequent customers).

[sui generis]

I suspect that the market for takeout has permanently increased - it will remain a less expensive option than running a sit down restaurant.

Except that a lot of restaurants make a lot of their money on alcohol sales, and most people don’t do take out alcohol sales (our locale legalized it, but my wife and I, who are fairly big eat-out people and drinking people, only utilized that once or twice on some specialty cocktails).  You might make a few bucks on a steak or some fish, but if you can make 2-3x on a $50 bottle of wine that’s a big deal you might no longer be getting.

Yeah, takeout seems like a sad and ineffective answer for both the restaurant and the customer.  As customers, I rarely like it because we pay the same price for the food, but don't get the presentation (which I discovered during COVID makes a real psychological difference to my enjoyment) or anyone to clean up after or to present the courses in the right sequence and all still the right temperature.  And for sure with respect to alcohol.  We got takeout cocktails and they were watered down by the time we got home if they served them with ice.  And again, presentation makes a difference!  Finally, I would never every buy a bottle of wine for takeout so we were spending a lot less and I was thinking about how hard that was for the restaurants. 

The only takeout I still like is Chinese or Indian, or pizza.  And I've never had alcohol for the first two, so that feels normal.

[Villanelle]

I think I've eaten in a restaurant maybe 3x in the last 2 years so I haven't noticed this, but a local FB group is all aflutter the last few days with restaurants charging a "Covid Fee".

Someone posted a receipt. 
Total before taxes and fees: $48.85
State Tax: 2.94
City Tax: 2.45 (This may or may not be either new on increased since Covid started.)
"RSTRNT fee" 4.89

48.85 in food cost 59.18, or more than 20% above the listed prices of the food.

So they have that 10% fee added.  There are all sorts of complaints about this particular restaurant on Yelp, etc. and the manager's responses make no sense.  Like claiming this is more fair than raising menu item prices because it allows them to adapt for different labor needs.  He cites a table of 1 as needing more labor per price than an 8 person table.  Um, even if that's true, you'd get the exact same revenue is you added 10% to menu prices, so it's an insultingly nonsensical explanation.  He claims that the fee is made very obvious, but then goes on to mention the multiple complaints they get (and Yelp is full of complaints about it), from people who weren't aware of it  You can't say it is obvious if you have many customers saying they had no idea.  Even if it wasn't intentionally hidden, clearly when you get multiple complaints you need to change strategies, if your goal is to actually have people be aware of it.  If you goal is to hope people just don't pay much attention when the check comes (and I think many people don't--they just add a tip and sign), or to have them not be aware until it is too late, then yes, keep it as is.

Apparently they aren't the only one, either.  So it seems a common strategy, at least in my area, is to not raise prices, but to... raise prices by adding a different fee. 

[Cranky]

I think buying alcohol in a restaurant is ridiculously expensive, so I wouldn’t even factor that in. LOL

But I can see that places like Panera are doing more takeout than eat in, at least around here, so I still think the market is likely to tilt that way.

[GuitarStv]

We eat out no more than once or twice a year.  Assuming 100$ meal average (probably high), if we see a 50% increase in restaurant prices that would work out to an additional 100$ per year cost.  Seems like no big deal.

[BlueMR2]

We used to eat out more than we should have.  Increasing prices is helping us put an end to that...  My pay is not increasing, but taxes took a big jump locally, insurance costs went up more than expected,  groceries are up slightly, restaurant prices were already bordering on ridiculous and now they're totally over the top.  Restaurants also happen to be by far the easiest ones to cut from our spending...

[mm1970]

My guess is part of what is exacerbating the perception of food shortages in parts of the USA is that grocery stores have basically stopped facing goods during the day to conserve the limited pool of labor.

What does this mean (facing goods)?

An employee goes down the aisle and pull goods from the back of the shelves so that there is a layer of produce right at the edge of the shelf. It looks more attractive, makes it easier for customers to see at a glance what products are available (and easier for them to pick one up off the shelf), and also creates the illusion of a completely stocked store since any empty space is hidden at the back of the shelves.

Here's more on the concept

It is different from stocking which is bringing out and putting up new goods on the shelves in that you are just rearranging the existing goods on a shelf to make them easier to see, easier to pick up, and look less like the store is half empty (even when it frequently is).

This was my first job.  I was a bagger but also "did shelves" (what we called it).  I was not allowed to STOCK the shelves, but I moved items to the front and faced them forward.  Very often this was the 5 am to 9 am shift, and nobody liked that shift.  But I'm an introvert.  I was a 17-18 yo nerd anyway.  I liked being done by 9 or 2, depending on whether it was full day or half day.  And: $3.35 an hour!!

[Catbert]

I think I've eaten in a restaurant maybe 3x in the last 2 years so I haven't noticed this, but a local FB group is all aflutter the last few days with restaurants charging a "Covid Fee".

Someone posted a receipt. 
Total before taxes and fees: $48.85
State Tax: 2.94
City Tax: 2.45 (This may or may not be either new on increased since Covid started.)
"RSTRNT fee" 4.89

48.85 in food cost 59.18, or more than 20% above the listed prices of the food.

So they have that 10% fee added.  There are all sorts of complaints about this particular restaurant on Yelp, etc. and the manager's responses make no sense.  Like claiming this is more fair than raising menu item prices because it allows them to adapt for different labor needs.  He cites a table of 1 as needing more labor per price than an 8 person table.  Um, even if that's true, you'd get the exact same revenue is you added 10% to menu prices, so it's an insultingly nonsensical explanation.  He claims that the fee is made very obvious, but then goes on to mention the multiple complaints they get (and Yelp is full of complaints about it), from people who weren't aware of it  You can't say it is obvious if you have many customers saying they had no idea.  Even if it wasn't intentionally hidden, clearly when you get multiple complaints you need to change strategies, if your goal is to actually have people be aware of it.  If you goal is to hope people just don't pay much attention when the check comes (and I think many people don't--they just add a tip and sign), or to have them not be aware until it is too late, then yes, keep it as is.

Apparently they aren't the only one, either.  So it seems a common strategy, at least in my area, is to not raise prices, but to... raise prices by adding a different fee.

In my area some restaurants did similar before the pandemic to cover increases in minimum wages and the requirement to provide health care.  Just raise prices if that's what is needed.  What's next a broccoli surcharge because the price of produce goes up? 

It was explained to me that commercial rents are based on revenue and revenue is defined in such a way that surcharges aren't included.