Restaurants facing higher costs as food gets more expensive

Rising food costs will deal a blow to the restaurant industry next year as it continues to recover nearly two years into the pandemic.

“I hope it will stop because it’s going to get crazy if the prices keep going like this and we are losing business,” said Cham Tran, Pho Tran restaurant owner.

Tran says it’s relentless with no end in sight.

“The cost is like crazy, it’s like 30, 40, or even 50 per cent up,” she said. “I look at my bills from two years ago and it’s like gone up so high, even doubled.”

That includes the cost of importing ingredients and buying product closer to home.

“Green peppers, red peppers, broccoli, it’s all gone up quite a bit,” said Tran.

Labour shortages, pandemic closures and rising debt are all factors for increasing restaurant costs.

“There have been quite a few supply chain issues that have impacted the food prices ,” said Dr. Simon Somogyi, Arrell Chair in the Business of Food at the University of Guelph. “There are fewer trucks out there to move products and that makes the moving of that product more expensive.”

Tran says the impact for rising food prices will force her to increase her menu prices.

“We are thinking about at least a 15 per cent increasing,” she said.

The industry says diners can expect that across the board.

“With their rising debt loads that they’ve had throughout the pandemic, they just don’t have that ability to absorb costs anymore,” said James Rilett of Restaurants Canada.

Another option to save costs includes smaller portion sizes, but Tran wants to avoid that for the sake of customers.