The cost of beef has gone through the roof, coffee prices are at a 13-year high, and even produce grown right here in California is more expensive than usual...The intensity of price inflation reports is increasing. All that money that Ben Bernanke paid out to Goldman Sachs, JPMorgan Chase and the rest of the banksters is working its way through the system. It will mean higher prices pretty much across the board. And some of it will even result in less options. Are you a fish lover? Well, while Lloyd Blankfein, Jamie Dimon and Tin Geithner are feasting on cavair, see if you can find some halibut at a decent price. SFC again:
For months consumers have grappled with higher prices at the supermarket, while restaurateurs pulled out every kitchen trick they could to absorb food inflation costs.
Well, the party is over. Experts say restaurant-goers can expect to see as much as an 8 percent increase in their checks.
And that may not be enough to keep the big chains alive, let alone the small independent eating places. Already suffering from flagging sales and low profit margins, record-high food prices - brought on by low supplies of corn, soybeans and wheat - could be the coup de gras for many restaurateurs. A number of chains, including the Texas parent company of Fuddruckers and Koo Koo Roo Chicken, filed bankruptcy last year; Sbarro Inc. is expected to file for bankruptcy protection as soon as this week. Meanwhile, El Pollo Loco Inc. and Perkins & Marie Callender's Inc. have been struggling with debt problems.
Peter Osbourne, owner of three San Francisco restaurants near AT&T Park, said he held out for three years but had to make changes, including a price increase, to keep up at MoMo's. The wholesale cost of mahi mahi rose from $5.50 to $10 per pound, he said, and he can't even consider putting halibut, which has jumped to $15 per pound, on the menu.And just wait until you see this Fall's clothing prices.
(Thanks2Nick)
It's a ruinous combination for restaurants - inflation is wreaking havoc with food prices, ask anyone who does grocery shopping on a regular basis. Combined that with the fact that unemployed people don't go out to eat (or rather, they should not be) and you have increased costs against lower business. Unfortunately, this will come down the hardest on the teenage employment rate, which is already around 25%. Hours will get cut first, then eventually the restaurants will close their doors.
ReplyDeletePeople will underestimate this effect until it comes times for these kids to go to college and they simply won't. What little money they made was likely sucked up by gas, car bills, and the like. With their parents equally hurt by the economy, a lot of potential will be wasted.