Eager to reenter society and seeking the familiar pleasures of a meal served on real plates, Dallas-area diners have returned to restaurants in droves. But at times they’ve been met with whittled down menus, higher prices and mediocre service.
A complicated tangle of global supply chain disruptions has created a difficult environment for restaurant operators who are trying to keep up with increased demand. Material shortages, labor scarcity and skyrocketing costs of imported goods have made it more difficult than ever to run a restaurant, and Texas businesses are struggling.
“It is far and away more expensive than it used to be to run a restaurant,” says Dallas chef and restaurateur Julian Barsotti. “We have yet to raise our prices, but we’re going to have to at some point.”
Barsotti, who owns Nonna, Carbone’s, Sprezza and Fachini restaurants, says supplies and ingredients have gone up in price across the board. For example, a bag of 00 flour used to make fresh pasta costs 10% more than it used to before the pandemic, he says. Everything from takeout containers to fresh meat and dining tables also have gone up in price for one reason or another, often creating unsustainable operating conditions.
Barsotti says he’s dragged his feet on charging more for dishes in hopes that the supply chain would normalize. He fears scaring off customers with higher prices.
“You’re just so reluctant to do anything at this point that would deter business after the traumatic year we’ve had,” he says. “But nothing I’ve read or heard indicates that there is an end to this soon.”
According to the National Restaurant Association, the country is on track to experience the highest menu price increases it’s had since 2008.
“Much of that is because, with the thin margins of a restaurant, they can’t absorb the 20, 30, 40, even 50% price increases on products and not have some of that pass to the consumer,” says Emily Williams Knight, president and CEO of the Texas Restaurant Association.
There are two key reasons for the widespread price hikes, she says — global supply chain shutdowns across all different sectors and sweeping staffing issues that are impacting manufacturing and production.
One example of this is chicken, Knight says. The cost of chicken is higher than it was in 2020 because plants that were already behind on production due to pandemic-related shutdowns are now experiencing a shortage of workers, which has dropped chicken production down 4% nationwide, and in turn driven up the price.
Knight says she’s spoken with owners of Tex-Mex restaurants who are floored over the price increase for the meat they use for fajitas. Skirt steak that used to cost $4.50 a pound is now $12 a pound, they told her.
“Demand far exceeded what we would have expected coming out of the pandemic, and you have less product, which is driving the prices up,” she adds. “We think it’s going to be six months until these supply chain issues are sorted out. It just feels like death by a thousand cuts for restaurants right now.”
At a Restaurant Depot in Dallas, assistant manager Jose Perez says customers have stopped asking for certain products and when they’ll be available again. They’ve grown accustomed to the empty shelves along with markups. These days, running a restaurant is about adaptability and getting creative with whatever’s on hand, Perez says, and it’s a dance the industry has been in since the start of the pandemic.
“Things that used to take three to four weeks to come in now take up to 10 weeks,” he says. “Anything that’s an international product has been affected in some way. Plasticware and to-go containers are really hit or miss because of shortages stemming from China. Mexican sodas can be hard to find because the supply chain for those has been affected, and those companies are facing employee shortages. A 35-pound bottle of oil that used to be $18 is now $40. In the 12 years I’ve worked here, I’ve never seen these kinds of shortages.”
Trey Dyer, president of Mesero Restaurants, says what restaurants really need is patience from customers as they work through the challenge of expensive, hard-to-get supplies coupled with understaffed kitchens and dining rooms.
He loads up on cases of Topo Chico for Mesero when he does his own grocery shopping, since the restaurant group hasn’t been able to get the sparkling water from its main supplier. One week they might have a hard time getting chicken, another week, it’s tequila.
“If it was super consistent, then it would be much easier for us … but the problem is, all of them go out of the product at about the same time,” Dyer says. “The supply is not there to restock everybody who is trying to restock right now.”
Supply shortages, inflation, staffing issues and supply chain disruptions aren’t unique to the restaurant business, but they’re the latest challenges thrown at an industry that hasn’t been able to catch a break — or its breath — in more than a year.
But Barsotti says these hurdles pale in comparison to what restaurants were up against this time last year, so he’s hopeful.
“It’s a better problem to have than having no business in a pandemic,” he says. “Business has kind of come roaring back along with issues with labor and inflation, but to me this is a more surmountable challenge than the depths of despair at the beginning of the pandemic, when all you could do was just pray to get through it.”
Recent Comments