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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsRestaurants are under threat as costs skyrocket and consumers cut back
https://www.cnn.com/2025/08/10/business/restaurants-food-costs-consumer-spendingRestaurants are under threat as costs skyrocket and consumers cut back
By Bryan Mena, Sarah Dewberry
Ikes Chili in Tulsa, Oklahoma, has been around for 117 years, surviving a myriad of challenges like the Great Depression, the Covid-19 pandemic and a once-in-a-generation burst of inflation. But 2025 already holds an even more complicated challenge.
The cost of everythings just going up, and weve got to figure out how to manage it right, Len Wade, a managing partner at the restaurant, told CNN.
He pointed to surging beef prices as an example, specifically hamburger meat on the wholesale level. In July, those prices were up nearly 21% compared to the same month 10 years ago, federal data shows. And passing the buck to customers might not be the best solution, Wade said.
The prices of other restaurant staples like coffee, eggs and cocoa have also ratcheted higher at various points this year.
In June, food costs overall were up about 21% compared to the same month four years earlier, according to the Producer Price Index, which tracks the prices that businesses, including restaurants, pay their suppliers. The rise in food costs outpaced the 17.5% increase in wholesale prices across the board during the same period.
They typically have profit margins of around three to 5%, so the math has to work, said Chad Moutray, the National Restaurant Associations chief economist. But if it doesnt, then they have to close up shop.
Restauranteurs are feeling price pressure on another front, too: Labor.
In addition to higher costs, restaurants are getting squeezed by another trend: Consumers arent eating out as much.
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BoRaGard
(7,586 posts)never forget
markodochartaigh
(4,110 posts)inflation and the even worse stagflation under "If the president does it, it's not illegal" Nixon, "a tragedy in which we all have played a part" Ford, and "The government isn't the solution, the government is the problem" Reagan.
During those years working class people in much of the country only ate out on special occasions and only at inexpensive restaurants. If conditions revert to the old days I imagine that we're going to hear a lot of complaining from those restaurant owners who were apoplectic about the covid restrictions.
the_liberal_grandpa
(244 posts)I went to a local restaurant for breakfast a couple of days ago. This restaurant is usually pretty busy for breakfast. There always seem to be businesses meeting and seniors who live nearby, normally make up most of the diners.
I don't go there often because its about $50 for breakfast for two. We can cut it by $10 If we don't have their shitty coffee.
This day was different
It was a ghost town.
My granddaughter who is 8 commented. "Whey are we the only ones here?"
I suspect this is becoming the norm at this restaurant and others.
We used to laugh when the cost of breakfast out rose to $30. But $50?
That's way too much.
I also note that the quality of service has dropped considerably most everywhere we go out to eat.
Even restaurant managers are becoming surly to customers.
I see a lot of these places shutting down in the months ahead as costs soar and people stop dining out.
dalton99a
(90,358 posts)Torchlight
(5,708 posts)to ignore the food prices rising much faster than inflation. My own silent curses began two months ago when retail vegetable and coffee prices took a giant leap.
There's no doubt Mr. trump's failures on a macro-level. I think if the price increases continues through the end of the year, his failures affecting hundreds of thousands of individual households could potentially spell disaster for him.
RedWhiteBlueIsRacist
(1,143 posts)They want to kill you, kill your businesses, they just want death under -47.