Marah Sluder, an employee of Hickory Hillz BBQ, prepares a sandwich on Wednesday.
Angelica Gonzalez Morales | Daily Journal
Local restaurant owners have been faced with the challenges as inflation rises. Owners say they’re constantly running into supply chain problems and dealing with ever-increasing prices.
In state of the industry report from the National Restaurant Association, more than half of restaurant operators said it would be a year or more before businesses conditions return to normal. The owners expect food, labor and occupancy costs to remain higher than in the past and continue to eat into their profit margins this year.
Nearly all restaurateurs — a whopping 96% — experienced supply delays or shortages of key food or beverage items in 2021 and expect these challenges to endure, the report says.
Historic inflation rates not seen in decades have driven up grocery store and wholesaler prices, which has resulted in more strain on consumers and business owners in Johnson County and across the country.
Take disposable cups for example. Chad Smock, owner of Hickory Hillz BBQ, bulk purchase foam cups for $40, but with high demand from other restaurants he’s had to look at other options. The problem with that is: other cups are more expensive, costing sometimes $80 or more.
Local restaurant owners have seem their prices go up and had little choice but to pass on those costs to patrons. Average menu prices increased 7.4% between May 2021 and May 2022, which represented the largest 12-month gain since 1981, according to the U.S. Bureau of Labor Statistics.
Business owners have to find a balance between recovering their costs and pricing their customers out, Smock said.
“Obviously we work in a business to make money but at the end of the day we can’t raise prices that don’t meet the means of the community that you are serving and there is a balance. If we are thinking about raising prices we have to keep in mind our customers,” Smock said.
Somewhere in the middle is sweet spot for Smock.
“We are going to have to meet in the middle. I may have to charge a little more with food but at the same time I’m willing to take a hit by not raising the prices beyond its means,” Smock said.
At Tried and True Alehouse, hottest selling menu item, the pork tenderloin, has increased by $1 to $10.99 in response to the increasing price of pork. Compared to last July, the price of pork has increased about 3%, according to a study from Wells Fargo on July 4th cookout prices.
With prices staying consistently high, Tried and True owner John Gladish II is looking at raising prices again.
“We took away a lot of our special food and had to increase our menu prices last year. We’re planning to do another price increase this coming fall,” Gladish said.
Supply shortages still have Gladish constantly searching for protein and dry goods to keep items in stock for his restaurant.
“Plan A is never telling the guest that we are out of something. Our Plan B has been looking at different vendors, but it seems to be more expensive to go to Costco or other vendors than our usual vendors,” Gladish said.
Going to other vendors is a hit that owners have to take, though, Gladish said.
Adding to the inflation problem, 51% of U.S. adults say they aren’t eating at restaurants as often as they would like, which is up 6% from before the pandemic, the restaurant association report says.
At Hickory Hillz BBQ, Smock said they’ve been busier recently than earlier in his over two years in business. That promoted Smock to add more options to the menu to accommodate other customers.
The restaurant now serves breakfast and burgers in addition to BBQ. Adding more options has helped Smock keep the menu prices reasonable, he said.
“Currently, it has been more difficult with Hickory Hillz BBQ compared to the beginning of COVID times because during COVID you were able to get the product and the prices during COVID were understandable,” Smock said. “Now that we are kind a out of COVID people look at it as a battle with inflation, supply chain and staffing and it’s all happening at once.”
Tried and True, which has been in business for five years, has noticed a slump in customers in the last month, Gladish said. That could be tied to strain on consumer spending as prices rise across the board.
“This past month in June was flat, which we haven’t seen for a long time,” Gladish said.
Like Smock, Gladish has also realized he needs to find new ways to bring more customers. The restaurant made a foray into hosting an event recently — a fundraiser for The Warrior 110 — and it went over well.
“We did a patio party in June a couple weeks ago which was a huge success, which we don’t ever do. Our mentality is to always be stacked with guests and have increased sales over time,” Gladish said.
Tough times like these make owners appreciate their long-time customers even more. Customers fuel local business owners’ resolve to innovate to persevere.
“We do greatly appreciate our loyal guests that always come back,” Gladish said.
