The Sconi

As inflation rises around the country, restaurants are struggling to keep prices low while maintaining margins. In some cases, restaurants are suffering losses on their most popular dishes just to keep themselves relevant in their market. 

Inflation has impacted small businesses and particularly restaurants in a number of different ways. Rising labor costs is one concern, but the cost of ingredients is another. One example is that of steak. The price of steak ranged from $29 to $35 per pound just a couple of years ago. Now, restaurant owners are paying $48 to $54 per pound for steak, leaving very little room for profit. 

While some owners are willing to lower the quality of their food to maintain their margin, others realize that it's a losing battle that will only drive people away. 

“We've never had a complaint on any of our prices that we've set, mainly because I always have a standard, which is we sell the best steak. The best burgers. Always. And the quality always shines through,” Nick Dawson, chef de cuisine at Barringer's in Fish Creek, said.

The cost of ingredients is clearly a significant challenge to owners. The price increases come from the food suppliers, and then it's up to owners whether to pass the cost on to consumers. 

“The big companies raise their prices on me, but I just, I just can't seem to raise them up that high, because I'm in a farm area. It’s a small town here, and you go too high, they go someplace else,” Greg Phillips, owner of Flipper's Cove, said.

Ingredients are a large cost, but labor is also putting the strain on restaurants. 

“A lot of the inflation has increased labor costs. So we have to be really flexible, you know, a lot of times a lot of chefs, a lot of managers used to manage and really be chefs. They used to be out of the kitchen, more along lines of costing and kind of a leadership role, ownership role. They don't own the business, but to be a good leader you have to have that ownership mentality. But the pandemic has brought us back into the kitchen. We are doing a lot of the work ourselves,” Dawson said.

Many restaurant owners are having to be creative and find margin elsewhere rather than compromise the quality of their food or raise prices for their guests. 

Jerry Lintz, a restaurant management instructor at Northeast Wisconsin Technical College, said that there are other ways to save on costs other than raising prices. 

“You can make minor changes in price, ingredients, change your business hours. There's other things to do rather than looking at cost-cutting. Cost-cutting carries a negative approach,” he said.

Unfortunately for restaurant owners, there seems to be no sign of inflation slowing down.