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Restaurants have no choice but to raise prices on their menus

restaurant costs
Posted at 1:11 PM, Sep 09, 2021

BALTIMORE, Md. — Restaurants have suffered throughout the COVID-19 crisis and that isn’t ending anytime soon. Beyond changes to dining and hours, they are dealing with rising costs of products. Some owners say they have no choice but to increase prices on their menus.

You can’t miss the smell of Gundalow Gourmet’s homemade chocolate chip cookies when you pass by. Homemade delicious local options; it’s what they are all about. Dana Sicko, the owner of the shop, has been living that very dream for nearly a decade, but of course, COVID-19 changed her business's purpose and future plans.

“I have not changed our prices in a decade and I finally had to because there are things that'll keep me up at night for the prices that they’ve increased," Sickow said.

Instead of simply focusing on serving great food and providing an authentic experience, she has had to stress over staying in business.

“Most of the items that I need, from forks to paper packaging, have all increased by 50% or more," Sicko said. “Gloves went from being $18 a box for 1,000 of them to $90 a box. $90, I mean, I just hit the floor and I just started crying.”

Those increases have given her no choice. She’s had to raise her prices.

“By going up by a dollar or two, it makes a really big difference for us," Sickow said.

She’s far from the only business owner experiencing this struggle. Gail Furman is one of the owners of Max’s Taphouse in Baltimore and she understands the stress.

“It’s heartbreaking," Furman said. “We’re one of the top 20 beer bars in the world. We can hold 500 people in our establishment in our various rooms.”

The limited supply chain has given them no choice but to change their identity. With only one room open, they have pivoted to serving barbecue and are not receiving most of the beers they usually have shipped in.

“Every supply chain that you look at is broken," Furman said. “Because of the limited labor, because of the limited product out there, products and costs are dramatically increasing.”

Furman has also had to increase prices.

“Chicken wings, pre-pandemic, they were roughly $45 to $50 for a case. Last week, they were $196 a case," Furman said.

Even worse than the increase, she’s had to remove certain items from the menu.

“Everyone knows about crab cakes and crab meat in Maryland. The price per pound has gone up from $21 a pound. Yesterday, it was $52 a pound, which is astronomical, so a lot of us have had to take crab products off our menus," Furman said. “People just aren’t going to pay the prices we would need to charge to produce that product.”

These increases could make or break local businesses like these across the country. Joann Weiner, an economics professor at George Washington University, says she isn’t surprised by what’s happening.

“Partly why prices go up is because after you’ve had a downturn, when demand falls, by definition, when that downturn has become an upswing, people now have more money in their pockets. They go out and buy things. As more and more people want to buy things, well, the way the markets ration these relatively scarce things, they have the prices go up," Weiner said.

She says it also feels drastic because prices haven’t moved much in the last 10-15 years.

“So there’s no surprise that the eating out will get to be more expensive as the costs of workers goes up and wages are going up as we know, as restaurants try to attract people to come in and work," Weiner said.

Right now, there is no guarantee. These local restaurants are simply doing everything they can to stay afloat.

“If I can take those prices down, I’m going to take those prices down right away," Sickow said.