“Inflation has been devastating to the restaurant industry,” Kelsey Erickson Streufert, director of public affairs for the Texas Restaurant Association, said in an interview. “The reality is that COVID has created disruptions in the economy the full feeling and effect of which we are still feeling.”

Doug Clothier, operations manager of Tia Juanita’s Fish Camp, said the restaurant has seen seafood prices go up 30-40% and the cost of shortening more than double. Clothier said the price increases have affected the company’s revenue because it costs more to operate the restaurant and customers have less disposable income to spend.

“It’s a pretty vicious cycle right now,” Clothier said in an interview. “People can’t afford to keep spending more money.”

Restaurants in the Beaumont area have had to adjust the way they do business in response to rising prices. Charlie Jones, the owner of DaddiO’s Burger, said “everything” the store buys goes up in price “every week”.

With margins already tight in the restaurant industry, Jones said one way to stay profitable is to pass some of the costs on to customers.

“Unfortunately, one of the only ways to counter [inflation] is to adjust your prices a bit,” Jones said in an interview. “You have to.”

Clothier said that in addition to raising prices, something he’s considering for Tia Juanita is reducing portion sizes. He said the restaurant already serves “generous” portions, leading many customers to take out food in take-out boxes, but they may need to cut spending to maintain quality and minimize the repercussion. of too much of the rising costs on consumers.

“I think the next step is going to be to reduce the portions because I hate raising the prices, it makes me cringe,” Clothier said. “We must [raise prices], yet. We have no other options.

In response to the rising price of ground beef, Willy’s Burgers completely changed some of its operations, according to Alden Pond, vice president of operations at Neches Holdings, which owns the restaurant. Instead of buying ground beef, the restaurant now buys whole brisket and ground beef and grinds it itself. In an interview, Pond said it was a more intensive process, but made enough of a cost difference to be effective.

Sunny Wong, a professor at the University of Houston Hobby School for Public Affairs, said in an interview that the current inflationary period is driven by a few factors, such as the Russian-Ukrainian war, low interest rates and rising consumer purchasing power. , resulting from a lack of spending during the COVID-19 pandemic and multiple stimulus checks.

Wong said this period of inflation is similar to a period in the 1970s and early 1980s when, like today, unemployment rates fell, prices gradually rose and gross domestic product held steady. However, because the Federal Reserve failed to act, Wong said the country experienced double-digit inflation in the early 1980s.

In addition to rising prices, the availability of various items also places a burden on restaurateurs. Everything from food to paper items like polystyrene take-out boxes were unavailable or only available in limited quantities, Jones said. DaddiO’s buys take-out boxes in bulk and stocks them in case the product runs out, according to Jones.

“When they’re available, we get more than we normally would,” Jones said. “In the past we just bought them week to week and they always have it and now it’s like you never know what you’re going to run out of.”

Inflation and labor shortages are two “inextricably linked” issues causing property supply problems across the state, Streufert said. The restaurant industry is squeezed on the supply side of the business, which it says makes it even more difficult to stay afloat than it already is given the low operating margins of industry.

“Just as we don’t have employees in our restaurants, the trucking industry doesn’t have enough employees to move goods, meatpacking plants don’t have enough employees to break down the meat, agriculture, the list goes on and on,” Streufert said. “As a result, costs go up, availability goes down every step of the way.”

Streufert said every day she hears about another restaurant closing in Texas due to the combined effects of COVID-19 and inflation. Often, she says, it’s the restaurateurs who have been in business for many, many years who decide to close their doors.

“I think a lot of [restaurant] operators are looking at the cost-benefit analysis, looking at that expense report at the end of the month, and they’re just not ready to keep going at this rate,” Streufert said. “Unfortunately, I’m afraid we’ll lose a few more restaurants, [but] I don’t think it will be as bad as what we saw at the start of the pandemic. »

Clothier said restrictions during the COVID-19 pandemic have strained the business. He said staffing has been a major issue during the pandemic, but supply chain issues causing uncertainty with the products needed at the restaurant have been more difficult to overcome.

“I definitely think it’s harder now because we’re just trying to get our groceries and the things we need,” Clothier said. “It’s a challenge every day trying to find places to get things.”

Jones had the opposite opinion. Although there are now economic uncertainties, Jone said he believes challenges related to COVID-19, such as poor orders due to poor communication with masks and plexiglass walls and the safety of employees, were more difficult.

“It was really scary [at] the onset of COVID,” Jones said. “We didn’t know what was going to happen. We weren’t sure if being in the restaurant business was the worst thing you could be in or not.

Wong said the Federal Reserve has been aggressive in its fight against inflation, learning from mistakes made in the 1980s that led to high inflation. The Federal Reserve raised interest rates by 0.75 percentage points on June 15, which Wong said was a “good move.”

“It’s still not enough, that’s for sure, but at least it shows the public and the market that the Fed is committed to aggressively fighting inflation,” Wong said.

Rising interest rates are making it harder and more expensive to buy things like home loans or use credit cards, which Wong says will hopefully discourage people from spending and businesses to borrow, which will slow market demand and lower prices.

Despite the Federal Reserve’s move, Clothier said he doesn’t expect food prices to fall.

“I don’t think we’re going to see prices go down, nothing like we were before the pandemic,” Clothier said. “I just think that’s going to be the way of life now.”

Pond expressed a similar sentiment but was a bit more optimistic. He said he hoped prices would eventually come down enough to make a tangible difference, but agreed food prices were unlikely to return to pre-pandemic levels.

“It will never return to the original price,” Pond said. “Honestly, I really don’t know what to expect.”

Streufert said despite the current challenges, she believes the restaurant industry will survive because there will always be a demand for the services restaurants provide. With people continuing to move to Texas, she said demand will only increase.

“This is a temporary state that we will all go through,” Streufert said. “We have certainly been through periods of inflation before in the history of our country and I have no doubt that we will be through this one as well.”