Calgary restaurant owners say they are being forced to raise menu prices and cut staff hours due to rising food and material costs.
Since the start of the war in Ukraine, the cost of living has risen sharply for millions around the world — and Calgary’s food industry is feeling the pinch.
Carolina De La Torre says inflation has been causing problems for her business since last winter. She is the co-owner of Arepas Ranch, a food truck and catering service in Calgary.
De La Torre has run the food truck with her husband Phanor Viera and their daughter Karen for six years.
Through their business, the family introduced many Calgarians to the arepa: a traditional dish from Venezuela and Colombia.
But the prices of some basic arepa ingredients, such as corn flour and canola oil, have fallen victim to inflation.
“It’s hard for business, it’s really hard,” De La Torre said.
The food truck owner says she tries to cut costs where she can so customers don’t see a significant increase in menu prices.
De La Torre said the family business is trying to source more local, seasonal produce from farmers’ markets. They also now go directly to wholesalers for some ingredients.
But even with those savings, De La Torre says the business has had to raise the price of most menu items by a dollar.
Adding even more financial pressure to the food truck’s bottom line are sky-high gas and propane prices.
Stay optimistic, rely on customers
Rising food prices have forced Arepas Ranch to change some of its recipes. The price of yuca, a root plant, has nearly doubled, according to De La Torre, so the food truck replaced the ingredient with a cheaper plantain variety.
Avocados are also more expensive, so the business is rationing its guacamole more carefully than before.
But while their profits have fallen over the past six months, the family remains optimistic.
“We went through the pandemic and that was really hard. So now it’s inflation and we’re going to go through that too,” De La Torre said.
The family doesn’t have the option to simply stop operating their food truck, De La Torre says. First, summer is prime season for food trucks, and the business has several catering contracts it can’t pass up.
Daniel Paez, a customer at Arepas Ranch, says inflation won’t stop him from visiting the food truck.
“If we want to move the economy and help everybody, each other, we have to help small businesses as well,” he said.
De La Torre says most people understand why menu prices are going up, and so far, Arepas Ranch hasn’t seen a drop in customers.
Small profit margins are shrinking
In an emailed statement, Restaurants Canada said retail food prices rose 10.1 per cent between June 2021 and June 2022.
The organization said that according to restaurant operators, menu prices are expected to increase by 7.8 percent by the end of 2022 compared to the end of 2021.
That’s the highest increase in menu prices since the introduction of the GST in 1991, Restaurants Canada said.
Ernie Tsu, president of the Alberta Hospitality Association, says restaurants currently have no choice but to raise prices. Profit margins are no longer as high in a typical year, Tsu said, with the average Canadian restaurant making about five to seven percent profit.
“It was already hard to get out of the COVID,” Tsu said. “For these local entrepreneurs and owners in the hospitality industry, they now have to move the needle with inflation to try to stay alive and stay as profitable as humanly possible.”
Restaurant owners now have to be creative to retain customers.
Tsu said many of the restaurant owners he spoke with are trying to work more with local suppliers to keep ingredients fresh and seasonal.
He also said some restaurants are switching to healthier options or offering more vegetarian options.
Reduction of working hours of employees
Red’s Diner, a chain restaurant in Calgary, has also raised prices in recent months. But according to its CEO, changing the popular menu or reducing portions and quality of ingredients is simply out of the question.
Logan Campbell says the diner’s most popular menu item has gone up about $4 over the past five months.
The CEO says the restaurant chain has recently been using paper menus because they had to reprint them about every two months to update prices.
“Every day we’re looking at sales hour by hour and seeing if there’s any way we can track our work and see if we need that many bodies,” Campbell said.
Campbell said the inn now schedules staff every 15 minutes, rather than hourly or half-hourly, to save some costs.
“The same goes for the kitchen, we track everything back there and really reduce food waste,” he said.
All in all, it’s a stressful time for Campbell, who says he’s never seen inflation this bad in his time working in the restaurant industry.
He relies on regular customers to help the diner through this rough patch.
“We want our customers to come back here and still get the same merchandise they’ve been used to getting for the last 10 years of our business.”
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