While business is back on its feet, restaurant owners are still grappling with ongoing effects from the pandemic such as increased food and labor costs.
Provender Hall opened its doors in the Fort Worth Stockyards in July 2020 and last year owner Marcus Paslay said business was doing well.
“The trajectory is to the top right. It was good. We’re busy now, ”said Paslay.
Even so, Paslay’s restaurants are known to operate on a tight profit margin. Like many others, his restaurant bears excessive food costs and higher wages for the workers.
“I think one of the biggest price differences we’re seeing is obviously the work. It’s almost double that. The beef price has gone through the roof, ”he said. “We have slowly done a little, a few price increases. We recorded some of it. We are passing some of it on and it is just a step-by-step process that we need to keep monitoring. “
Michael Davis, a professor of economics at SMU’s Cox School of Business, said the challenges in restaurants are similar to those that grocery stores face. The entire supply chain is restricted, he said.
“When it is difficult to find truck drivers, when it is difficult to find storage space, it is expensive to refuel a delivery vehicle. All of these restrictions, all of these costs are passed on, ”he said. “Such things have risen sharply, especially with fresh meat. It’s not the result of some greedy monster out there just trying to raise prices. It is the basic law of supply and demand at work. “
Much of the market action was due to the pandemic and the government’s response to it, Davis added.
“We need wages that adjust to where people are ready to go back to work. However, the other thing we need is this huge amount of spending to slow down. Remember, the government spent several trillion dollars to stimulate the economy to help people through the pandemic, “he said. “A year or a year and a half ago, there wasn’t a lot of money to spend, so now we have this huge rush in consumer spending. Until we have achieved this balance between supply and demand, supply depends crucially on the workers. Until that happens, we’ll see what we see now. “
Melissa Stewart of the Texas Restaurant Association said some restaurants are raising prices for the time being to offset the cost. Others also restrict menus, but she also advised companies that offer take-away to be aware of the deliveries they take with orders.
“Really think about what you put in that bag. Do your customers need plastic clothing? If they don’t ask for it, maybe you won’t give it up. Make it an option, ”said Stewart.
For the time being, entrepreneurs ask their customers to be patient.
“Come in with an open mind, a little. We have all been through the closings of COVID-19 and all of that. It took a lot of open-mindedness and patience, ”he said. “It goes on now, just differently.”
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