The restaurant industry continues to see challenges with rising costs.
Food, labor, and operational expenses are having an impact on the restaurant industry, which is making some businesses have to run a tighter ship. This means possibly bumping up menu prices and cutting employees.
According to the National Restaurant Association, food costs for the average restaurant have gone up 29% while labor costs have gone up 31% over the last 4 years. Since 2019, there has been a 27.2% cumulative increase on menu prices in order to offset things like labor, rent and utilities.
CEO and founder of Convive Hospitality Consulting Jonathon Horowitz said restaurants are still working through the effects from the covid years, inflation and supply chain issues.
"Everything that goes into running the hospitality business right now has increased over the past few years," he said. "Contributing to the challenges are economic uncertainty."
Uncertainty is never comfortable and so there has been some changes in consumer behavior as a whole. Horowitz said tariffs and cost increases have also made people nervous.
"Consumers are pulling back a little right now because people want to feel comfortable about spending their money," Horowitz said.
There's been no dramatic increase in costs this year, but there are still those concerns from people when it comes to how tariffs will affect prices for food down the road. It's possible prices could go up again.
"Restaurants have had to raise their prices over the past few years because of the inflationary issues and they really are struggling not to have to raise their prices again because eventually the consumer just says 'it's too much,'" said Horowitz.
There's only so much a consumer can take with the price of food at a restaurant. If they see that their favorite places are continuing to raise prices, they're eventually going to go somewhere else, even if they want to support local businesses.
"The margins are already thin and if they don't raise their prices, eventually they're going to start losing money so it's a very difficult situation for a lot of restaurant businesses locally," Horowitz added.
Locally, a lot of restaurants feel like they're stuck between a rock and a hard place. At the end of the day, it's a business that has to make money, so difficult decisions may have to be made on continuing to raise prices or shifting around hours and labor, which could also affect the customer experience.