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Food inflation costs really take a bite out of profit margins for North Texas restaurants

Seyoum says last year one egg cost $0.18, and today it's $0.27. At the Original Pancake House, they serve up to 9,000 eggs at one location per week.

DALLAS — The restaurant industry has been handed a full plate lately. They've already been dealing with supply chain issues and labor shortages and now add food inflation.

"It's one of the most challenging times we've seen in history," said Jonathan Seyoum, a part owner of The Original Pancake House. 

WFAA met with Seyoum at the Addison location. Seyoum has been looking at profit and loss sheets for nearly three decades.

"I have never seen so many different things happening all at the same time," said Joe Monastero, chief operating officer of the Texas Restaurant Association. 

Monastero said the confluence of factors has made it a very difficult climate for restaurants.

According to the National Restaurant Association, the wholesale cost to restaurants for every major food group has risen, and especially, compared to last year. The wholesale cost of butters, fats and oils is up 60%. Poultry is up 28%, fish and milk costs are up 21%, beef is up 16%, and fresh vegetables is up a staggering 99% from last year.

Seyoum told WFAA that lately, every restaurant manager has been faced with the decision of having to increase menu prices.

Monastero said restaurants are having to use QR codes to adjust to the changing landscape of food and product offerings. He wants to remind the public that these are not easy decisions for restaurants to make, especially when you realize the margins for profit are already slim coming out of the pandemic. 

Seyoum told WFAA the regulars notice when the prices go up immediately, but they're also understanding.

"For every dollar I increase or every penny increase...who is not going to be able to afford it? Who is not going to come back? It's a balancing act," Seyoum said. 

He told WFAA that their customers come for the food and the environment and some things just can't be sacrificed.

Seyoum really sees food inflation in the wholesale purchase of eggs and bacon. When you're running a morning and lunch spot, eggs and bacon are important products to have. He said last year one egg cost him $0.18 and today it's $0.27. 

At the Original Pancake House, they serve up to 9,000 eggs at one location per week. According to the latest consumer price index for April, eggs saw some of the largest price surges at 10.3%.

"The numbers, they're unprecedented. There are restaurants continuing to fight every day to stay open," said Monastero.

Seyoum said raising menu prices is a last resort but a necessary one. He said they can't cut short on quality or portions, because those kinds of changes customers really notice.


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