Rant: Dires Times For Restaurants

These are dire times for restaurants, with a combination of factors contributing to the perils facing the restaurant industry. And it doesn't appear that these factors will lessen anytime soon. 

A recent CNN article addressed this issue, stating: "Local restaurants across the country are reeling as some key costs skyrocket and consumers — who remain nervous about the economy’s future — cut back and become less willing to pony up for higher prices."

Anyone who has gone shopping at their local supermarket understands the rising costs of many products, and of course restaurants face that same problem, rising ingredient costs. For example, beef prices, from ground beef to steak, have been rising to record levels and are up 10%-12% since last year. The prices of plenty of other ingredients have risen significantly as well. Thus, restaurants, which already operate on small margins on their food, have had to raise prices because of increased ingredients costs. 

In addition, many restaurants are facing labor issues, finding it difficult to find good help. This problem has been facing restaurants for a number of years, even before Covid, and is probably even worse now. That too has led to increased restaurant costs, which often lead to higher prices. I've spoken to a number of chefs in the last several years who have mentioned their difficulties in hiring quality staff. Plenty of other industries are having a similar problem.  

Complicating matters, and leading to further restaurant woes, is that consumers, of both lower and middle-incoming, are not dining out as much as they once did. They are having their own economic woes, and restaurant dining, often seen as a luxury, is one thing they feel they can more easily cut back on. And as restaurants are forced to raise their prices, it makes it more difficult for consumers to dine out.    

What's the solution? This is certainly not an easy situation to resolve. However, part of the solution likely requires consumers to dine out more. When you dine out, you can take some cost-cutting measures, maybe order less appetizers or less cocktails. Get take out from some of the better restaurants, rather than the usual fast-casual ones. Make dining out a special experience, so you feel you are getting your money's worth.

What other solutions do you suggest?