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We’ve already talked about how Charlottesville residents payed through the nose for the most expensive turkeys in Virginia.
With gas prices at all time highs, a lot of you will start to feel the burn in the food industry. The USDA says that in 2007, food prices increased 4% and will increase another 3% in 2008.
Does this mean that restaurants will try to raise prices? Do restaurants actually feel the impact of this? What about you?
I've noticed..
Read more here. I know there are a lot of restaurant owners who read this site and I’d love to hear your thoughts on increasing prices vs feeling the pain.
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Tagged as: Charlottesville, Questions, Restaurants
I was just talking about this last night. Amigo’s on 5th has raised their prices roughly 25%. A while back Marco and Luca raised their prices 20% or so. I guess we’ll be seeing even more restaurants following suit also.
I know of at least two places in town that plan to raise lunch prices in the new year, but i don’t know if that means January or April. I believe I heard that Sysco is raising their prices somewhere between 3-5% across the board and I know the price increases from suppliers has been more dramatic from folks who buy local meats and produce. The average rule for restaurants is that your food costs can’t be more than a third of your price (as you still have to factor in labor and overhead before you actually get to profit), so any increase from a supplier should show up times 3 in terms of what you and I pay for a sandwich, assuming everyone’s paying attention to their bottom line (and I hope they are - I’d hate for the chains to take over if we have a small recession).
I’ve noticed more of a feeling that the portion sizes are shrinking……
Lys is right .. the general rule is 1/3rd food cost, 1/3rd labor + overhead, 1/3 profit.
I won’t be stunned if prices go up. I’ve had to raise prices to play frickin’ kickball because my shirt costs went up due to gas and cotton going through the roof.
C’est la vie.
This may be a topic for another thread, but the price of beer is also going to skyrocket this year because of a hops shortage. A lot of acreage has now been transferred to growing corn and other crops for ethanol production. An article in the Economist last month estimated the price of hops has increased 600 percent in the last half of 2007.
The price of everything is going up. Just the way it is.
At least those elitist beer drinkers will be punished. For those who like beer with hardly any hops, our day has come!
Dont worry. I’m sure all of our salaries will rise accordingly to compensate for the inflation.
Anyone else notice that Lys has mentioned Sysco twice in one day. Does someone you know work for them or do you have an odd hobby?
I just hang out with way too many restaurant owners, so there is much kvetching about the evil empire and their twenty item order minimum, despite the fact that everyone still buys from then because the rep’s a nice guy and you can’t beat their prices. That and I read way too much Michael Pollan so my food obsession is a bit out of control.
Heyo,
I would guess some restaurants will be raising prices. We haven’t recently, but I’ve certainly thought about it. Everyone of my suppliers (Sysco included) has raised prices, and/or mentioned it will be happening.
I was at Sam’s Club last night, and even they have raised prices (Milk, Heavy Cream, Shredded and Block Cheddar). Dairy in general is really expensive (depending on where you shop, you may have noticed your gallon of milk going up a dollar in the past a year). My big point, though, is when Sam’s has to raise prices, prices are going up. Sam’s/Wal Mart is famous for forcing suppliers to keep costs down.
I know we generally keep it light around here, but I think there could be some real issues with the economy in the coming year. Not talked about a lot, but inflation is here, and not just the 3% CPI.
Brave is the restauranteur who admits to trolling for ingredients at Sam’s Club…
That’s just one of those secrets best left in the kitchen
It doesn’t look good:
http://www.truthout.org/issues_06/071307HB.shtml
http://www.grist.org/comments/food/2007/12/20/
http://www.iht.com/articles/2007/12/17/europe/food.php
Our business in Waynesboro Virginia supports local farmers (dairy, herbs, chestnuts, fruit, berries, and more) — mostly family farmers in the Shenandoah.
What gets me is how much more food costs in Charlottesville than in some other parts of the country. When I was at home last summer, I couldn’t believe how cheap everything was, and when we got back to C’ville and I went grocery shopping, I felt like I was being robbed.
That’s because there are a lot of wealthy people and children of wealthy people who will pay anything and it drives the cost for the rest of us up. Why else would a one bedroom condo cost $190,000?
just out of curiosity, what’s considered too much for a meal? let’s say per person, one non-alcoholic drink and a full tummy without dessert.
Interesting point by Ethan (14). I’d agree that there are a lot of wealthy people in town, and they may drive prices up. But I’d also bet they enable a lot of the “finer” things we enjoy (if not on a regular basis, at least once in a while). Good with the bad.
DDG (15), for me depends on the cuisine. What I spend (and think is fair pricing):
Burger and Fries - 7
Burrito - 8
Nachos - 8
Pizza - 7
Thai - 9
Breakfast - 9
I think for these prices you can get more than enough food in town at local joints.
i did notice Lys mentioned Sysco twice…..sysco sucks. They are crooks. when I bought my coffee shop they were the first thing I got rid of, and it cut my food costs in half. Good thing delicious Trager Brothers Coffee served at the Starlight Cafe is so yummy and Cheap! (shameless plug)
Starlight Cafe!!! Sounds like the place to be. I’ll head over right now. I hear those Liberty U kids are CRAAAAAZY
DDG-
for any ol’ meal out: $12
a dinner date: $25 (each)
for a special occasion (once every other month or so): $35
they are the craziest! Didn’t you see Footloose, silm?! Preacher’s daughters is crazy man!
you gotta get past that silm, my dear friend Jerry Fallwell has left the building, it’s safe now. well kinda safe….
J told me that some of the LU kids were “crazY” so I wasn’t makin’ fun of the ‘burg
i meant you are my dear friend silm, not fallwell….sheesh..that came out wrong….I’m tired nighty nite
ooh dang! I’ll be happy to visit. Just send a proper invite… Good night
Chad-
Could you please forward me the restaurant business plan that has 1/3 food cost and 1/3 profit while splitting overhead and labor for the last 1/3? I mean, outside of Bangladesh? It’s more like 30/30/30 with the last 10 for you if you’re lucky and no major equipment breaks down. And you think your staff should make just so slightly much more (read living wage) than minimum and maybe even have health insurance. And you DON’T want to get pre-made anything from anywhere. And, God forbid, have 2-ply toilet paper and recycled paper bags and …
Just sayin’.
Oh, I just read that and I sound bitter, I’m not, but it’s frustrating sometimes what you all expect from us as opposed to how much you’re willing to spend…
wendy, well said girl! I’m totally high fiving you. We should have lunch, I’ve been looking for someone who is in this crazy restaurant biz too! A woman- all the better.
little caesars large went from $5.00 to $5.55
thor has somthing to do with this
ARG! I’m innocent.
What if we setup a “restaurant watch” and every time someone raises prices we call them out on this site?
Wendy - is 33/33/33 that different from 30/30/30/10? I’m just ballparking it, I have some relatives in the business (sports bar) and that’s just the general ‘rule of thumb’ I’ve heard. It’s nothing hard and fast, calm down.
Thor - I really don’t see the point of that. I think most people understand prices go up as costs go up, so having something like “ZOMG PIZZA WENT UP 25 CENTS” seems a little silly.
Wendy - and that’s a sports bar in rural Pittsburgh, so the labor costs are actually that low (actually, pretty much everything is way lower). I’m sure it’s different for places with higher costs of living, like C’ville. (shrug)
Sorry, Thor. My allegiance is with the local restauranteurs. After all, someone out there is still going to Chili’s so the public deserves what they are willing to pay for.
Chad day, 33% profit is very different from 10% profit. The “ballparks” are on two different planets. Read her comment again.
Wendy is smart.
Sorry, just glazed over the numbers. Anyway, I believe that model is roughly true for the place I quoted.. labor costs in Western PA where you can pay minimum wage is way different than here, as is pretty much everything else. I’d imagine those numbers would be accurate for places in rural VA as well, I can’t imagine the people working at places around Lake Monticello are making much more than min. wage.
Wendy’s model may very well be true for places here, which is why you see so many restaurants struggle. Not a business I’d want to get into, but I’m glad so many other locals are doing it giving us good places to eat instead of all chains.
I would actually argue that it’s the overhead that kills you in a city like this. I am in a different place than many on this site, but if I were to complain about something food related, it would be landlords. The quite killer.
Yeah, I can’t imagine what the rent is on some places here, especially on the mall. Makes me wonder how stuff like The Cat Store can do enough business to actually survive, that space can’t be cheap.
That made me laugh…and I completely agree with you.
Food prices have to go up, at the store and in restaurants. Food cost inflation could see 5% this year so restaurants need to charge more or they go out business! There is food out there that has gone up proportionately, but there are foods out there that cost a bit less and the same result can be achieved. This really is where the business person will succeed over the common cook a certain amount of inventiveness or re-inventiveness needs be applied, how can I stay profitable and still put out a quality product (?) that is the main question all restaurant owners need to be concerned with. Take a look at sugar prices when Katrina hit, “corn” starch has gone up, beef because of feed, cheese is ridiculous at this point and oil is $100 a barrel.
I’ve always been very suspicious of the Cat Store, I think it’s a facade for underground gambling…..hmmmm…..you know the cats sittin’ around the poker table, you’ve seen the velvet painting. Oh….what? Oh, that was a bunch of dogs….sorry
Kidding, I’m kidding.
i read somewhere that the average american spends 9-11% of their income on food. western europeans spend upwards of 30%. why is it that we expect good quality food to be cheap? seems like these days it is the bad quality food that is cheap. cheap calories has america fatter and more unhealthy than ever. our expectation of cheap food has driven the small farmer out of business because in reality it takes brains, labor and time to grow good food and that is vaulable, right? arguably as valuable as the iphone and the ipod and a new hybrid car and designer bamboo shirts. what can we do to change americans’ value system when it comes to good food?
subsidizing farming so that food is “cheap” has only given rise to industrial, carbon eating, polluting, diabete-causing food production. what’s the next step? what can we do to make a true difference in c-ville for the long term?
Restaurant C.S.A’s???
Restaurant CSA’ s are a great idea. It will take some re-training of the purchasers and chefs, many of whom have been taught to buy what’s cheapest and lots from Sysco. But I believe if restauranteurs let their customers know they are making the extra effort to buy local food, customers would be willing to pay and become faithful, regulars of the establishment.
Speaking of what shop local is preaching, the new Michael Pollan book just came out, In Defense of Food. You may have seen the article Unhappy Meals in the New York Times Magazine earlier this year where he sets up the premise, but it’s basically the next step after Omnivore’s Dilemma, and his mantra is “eat food, not too much, mostly plants.” He talks a bunch about how much moeny and time other countries/cultures spend on making and preparing food and how Americans have gotten so far away from this (he likes to say that if your grandmother wouldn’t recognize it as food, it isn’t food).
Man, Sysco may not be getting a fair shot here but hell someones got to take the brunt of it, no, even when a lot of people really have no clue what some companies do. Let’s think about how much food is ordered, cooked and generally distributed throughout this area alone. CSA’s are really not the way to go, really they are not. The cost for planting, growing and then distributing the product (labor) not too mention the cost if there is a drought (cost of h2o) or a freeze or the cost of land then I can not imagine the cost of food as it would relate to the consumer. A lot restaurants do use product from CSA’s and that is a good thing, but it is not the answer, in the end they would not be able to supply the demand. Where does the product come from in the winter, green houses(?) and who pays for that. Regardless, food is going up and up whether you pay at the store or at the restaurant, you will pay. Not to bash a CSA, but weigh the product you get weekly, weigh the product you throw away from not using it in a timely fashion (subtract that from the total weight) from this you get actual used weight. Divide that number and get your cost per pound and let me know it works out. Not everything is what it seems, CSA’s have to pay the people to work and gas to deliver and their waste will be more as they grow causing you to pay more. Good luck.
And I happily do pay more.
sorry to seem “preachy” on the subject. i love this forum but don’t have much to add to the dating and sex posts as i am married w/ a two year old…. i feel much more equipped to reply to the food issues, but in no way mean to preach, but here goes.
i spoke about this thread to a local farmer who has been in biz for over 5 years. his take is: #1. he makes money farming now and has more demand from local stores and restauranteurs than he can supply. #2 - his opinion is that we need more young (25-45) farmers in our area to really make a big impact on having a sustainable local food system. #3 - he has seen the number of small farms in our area steadily declining. #4 - many of our area farmers are taking their crops and meats to the dc area, where demand and sales prices are higher than here.
anyone up for starting a farm? if you have the heart for it, seems like an open niche…
thanks shop local, I always appreciate your posts…..I go to the community market in Lynchburg to buy a lot of the fruits and veggies I use for our Juices at Starlight Cafe, I love to talk to the local farmers and try to support them as much as possible.
(married with a two year old too!)
I’m terrified that local farming is a dying breed….it’s hard long work and no one can afford to pay for extra help
Polyface Farm (Joel Salatin) is all about the profit. Sustainable, etc. His original claim in 1996 was that a couple with 20 acres working 50/hrs a week for 6 months a year could make $25K - $30K, and improve the land while doing it. (The book is called “Pastured Poultry Profits”.) I think he’s upped that to $40K now. He’s a lot more famous since his new book came out, and you get eat his birds at Rev Soup. They also just got in some really great prosciutto but I don’t know who makes it.
I know a few people who want to get into it. Hope it holds up.
caroline, do you guys make fresh veggie juice at Starlight? What selection do you have?
good morning thor! We just added juices to our menu last month, at this time we have carrot, apple, beet, ginger, tomato and spinach any combo you want. I will be growing wheatgrass in early spring outside in our courtyard patio, where most things in our patio garden our edible. Our juices are made to order and served at room temperature to allow those living enzymes to do their thing!
Caroline = Carri? Cause it’s me Wendy, from the last 15 years of your life in Charlottesville Wendy, and we need to come down there and visit you guys. Compare kids. Make some soup etc. I keep toying with the idea of doing a new restaurant in Lynchburg when James gets old enough, but only cause I miss Oliver. Think they’d go for the soup thing there?
Wendy!!!!! yes, it is I! you need to come visit, shoot me an email and I will tell you all about it over here…..cvillaingirl@yahoo
We got a lot to catch up on!
Is ‘make some soup’ a code? Should I make soup, or is soup made for you? What if you don’t like the soup when you get it? Is it considered rude not to finish the whole bowl…. I am so confused by soup etiquette.
Are croutons gauche?
floozy please make me some soup straight away!
Well, since I can’t exactly come out on a public blog and say, let’s get together and smoke some crack and catch up on old times while our babies play in the street , I went with soup.
But yes, you bring the soup.
nice. very nice.
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