Raise your prices,maybe? But no. “Customers will go elsewhere,” they said. Hospitality businesses at all levels were afraid of upsetting regulars,losing custom and being considered expensive.
Aleksis Kalnins,head chef at Matilda 159 Domain in South Yarra,said rising produce costs had forced the restaurant to raise meal prices.Jason South
The pandemic has done a good job of reframing pricing conversations. As we emerged from lockdowns in 2020 and 2021,restaurateurs became more confident about steeling their businesses for profit. They had to. Reserves were depleted. Loans would be called in. Deferred rent loomed.
Change didn’t always mean obvious price hikes though. We saw more set menus (which make income more reliable),an upswing in ordering via QR codes (which reduces the need for staff),time limits on tables (so more customers can be served) and Sunday closing (to avoid penalty rates).
Sometimes dish prices stayed the same but portions were reduced or garnishes minimised and extras that were once free – bread,a side of vegetables – were charged separately.
These innovations reduce costs. Many of them are also ways of managing with fewer workers.
Margins are usually slim:it’s rarely about the restaurateur’s next Ferrari.
The industry is still looking for enough hands after internationals were squeezed out of the country by an ill-conceived JobKeeper,and many underemployed locals moved to other industries.
In a tight job market,those who stuck with it were asking for – and often getting – more money.
Restaurants are extremely competitive and menu prices are calculations of the many costs that go into putting a plate of food in front of a diner. Margins are usually slim:it’s rarely about the restaurateur’s next Ferrari.
In fact,63 per cent of owners underpay themselves,as noted in the
The same document states that almost one-quarter of hospitality businesses were unprofitable,around 60 per cent made a slender profit (less than 10 per cent),with less than one-fifth having a healthier profit margin of more than 10 per cent. And that’s before recent cost of living pressures.
When, and cost more,that money has to come from somewhere. If a restaurant absorbs increased costs,that doesn’t mean these costs disappear. It just means the supply chain is rattled at a different point.
Wages could be curbed,either by underpaying staff or running with fewer workers,thus adding to the physical and mental health pressures on those steering the ship.
Maybe lower welfare meat is used:your rotisserie duck is fattened up in a shed rather than a paddock;you’re eating cheaper imported shrimp not sustainably harvested local prawns.
Perhaps the budget set aside to look at better ventilation to mitigate COVID transmission goes towards the vegetable bill.
Because eating at restaurants is optional,because householders buy ingredients and cook them too,the dining public has always felt free to sling opinions on prices.
Matt Golding
“I can buy a steak for $10!” is the fancy restaurant equivalent of sneering “My kid could paint that!” at an abstract art show.
But now everyone can see that costs have skyrocketed. Anybody can look at a gas bill and feel a little wobbly.
I was at a primary school play this week and the Year 5 kids made a joke. We’re all in it.
There’s no reason restaurants should absorb costs for the rest of the community.
Big supermarkets? Sure. Power companies? Yes. But the restaurant down the street? No. If you don’t like it,you absolutely should buy the steak and cook it yourself – and skim a stock for 12 hours to make a beautiful jus while you’re at it.
A,but if it represents value,a fair supply chain and is delicious and pretty as well,then I reckon it’s worth it.
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