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Increasing food cost, wages may push restaurant owners to raise prices

Posted at 9:26 PM, May 20, 2021
and last updated 2021-05-20 23:26:25-04

SALT LAKE CITY — The past year has been tough for many, but restaurant owners were hit particularly hard. Now, mask mandates and social distancing requirements have been lifted across Utah as people settle into things slowly becoming more normal.

But restaurant owners are now facing new problems: rising food costs and high cost of labor. In order to stay competitive and find restaurant employees, both local restaurants and national chains have increased minimum wages for employees.

WATCH: Some Utah restaurant owners struggle to find staff

Dan Eckersley is the Director of Operations for ‘Bout Time Pub and Grub which has several locations throughout the state. They raised minimum wage for cooks from $12 to $15 to stay competitive, he said.

“Just even trying to find employees, try to find people that want to work, want to come in,” he said.

Himilayan Kitchen in downtown Salt Lake is also facing the same issue of finding workers, as it is a nationwide issue. Employees at Himilayan Kitchen are now making a few dollars more an hour, because no one was applying at the old wage, owner Surya Bastakoti said.

“Now, they don't want to work at that price,” he said.

It’s understandable, Bastakoti said, as the housing market in Utah is causing prices to skyrocket.

It’s concerning that the rising cost of living, and high home prices could have an adverse affect on the economy’s recovery, Andrew Keinsley, Weber State University Assis. Professor of Economics said

“We might see a tradeoff, that hey I am willing to pay more for a house but that is going to eat into my budget for other aspects, for food or clothing, for entertainment, some of those kinds of things,” he said.

Another new increased expense: food.

WATCH: Here's why restaurant workers aren't returning to the industry

The USDA is predicting an increase in both food prices at grocery stores and restaurants over the next year. Wholesale prices for meat, poultry and fats/oils are also expected to continue to rise.

“You are going to see some pressure on these companies, they are having to pay higher wages, they are having to compensate their employees at a higher level and eventually push come to shove that is going to leak into price, how much, we are going to have to see,” Keinsley said.

In anticipation for a potential national minimum wage hike, Eckersley said they decided to raise food prices, but now they hope they don't have to do it again.

“You have the supply chain issues of trying to get burgers, trying to get chicken wings, limes went from $30 to $70 in the last few months,” he said.

Something must be done, and that likely means raising menu prices soon, Bastakoti said.

“It has come to the point where I can’t raise their salary and then do all this stuff and then keep the same prices,” he said.

Bastakoti said he anticipates printing new menus with higher prices in the next few days and says several other restaurant owners he's spoken to say they're about to do the same thing.