Local restaurants across the US are facing hard times as food and labor costs continue to rise, while fewer people are eating out.
Ike's Chili, a longtime Tulsa eatery with over a century of history, is among many small businesses currently struggling to keep up with challenges, CNN said.
"The cost of everything's just going up," said Len Wade, managing partner at Ike's. "We've got to figure out how to manage it right."
Food prices have climbed sharply. Prices for everyday staples like beef, coffee, eggs, and cocoa have all gone up compared to past years.
Government data reveals that food prices in June have risen by 21% compared to four years ago, climbing faster than most other products people buy.
Raising menu prices might seem like the solution, but Wade is hesitant. "I need to raise my prices again right now, but I'm concerned that I'm going to price people out," he said.
Labor is another big problem. Wade said finding good workers is harder than ever. In the past, he received multiple job applications daily. Now, he says, "Since 2019, I've received about a dozen in total."
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 pay higher prices. https://t.co/xkcOGDujKr pic.twitter.com/KRVeixjULb
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Fast-Food Chains See Major Drop as Consumers Eat at Home
Experts say rising wages and fewer workers are putting restaurants in a tough spot. Immigration changes have also led to fewer workers in the industry.
Consumers are also spending less. A lot of Americans are cutting back on eating out and choosing to have meals at home more often these days.
According to FinancialTimes, a research from Circana shows that in the first three months of this year, Americans dined out significantly less, with about one billion fewer restaurant meals eaten compared to last year.
Chains like McDonald's, IHOP, and Applebee's have all reported fewer visits from customers, especially those with lower incomes. "They're trading down to eating at home," McDonald's CEO Chris Kempczinski said.
Middle-class families are cutting back too. Linda Ford, a Tulsa restaurant owner, explained that if customers feel prices don't match the value they expect, they tend to stop coming altogether.
Data shows fast-food restaurants have seen the biggest drop in traffic, with visits down over 2% this year.
Inflation is part of the problem, but so is worry about the future. People are holding on tighter to their money, even as prices slow.
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