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A surge in food prices this year is affecting local restaurants and grocery stores, adding to an ever-growing expense list for business owners. But some are trying to keep their businesses from passing those increases along to customers.
The U.S. Department of Agriculture recently said it expects retail food prices to increase 3.5 percent to 4.5 percent this year, after climbing just 0.8 percent in 2010.
Nick Castronova, longtime owner of the Lamplighter Restaurant on Fetzner Road in Greece, says margins of profit for restaurant owners have decreased in recent years.
“Most of us in the restaurant industry are basically gun shy about raising our prices too much,” he said. “Our customers are going through the same economic problems that we are.”
Catronova said increased food prices compound with other factors that lead to smaller profits. “Food and beverage cost is the leading indication, along with labor and credit card fees, but those three things have seen our profit erode,” he said.
He says he’s seen a 40 percent increase in labor expenditures over the last four of five years.
The Lamplighter, known for its fine dining, has a menu with high-end items like angus beef and fresh seafood. Increases are passed on from suppliers, who are getting similar upticks from distributors.
The changing market leads to more shopping around, Catronova says.
“We’re kind of at the mercy of what the market will bear,” he said.
Supermarkets see similar problems. Jo Natale, the director of media relations at Wegmans, said a couple factors have led to the increase of food prices.
“Higher commodity costs, higher energy costs and a greater demand for food globally has contributed to driving food costs up,” said Natale. “Cost increases are pretty consistent across the board.”
She said that specific commodity costs that have increased include wheat, corn, soy and anything that feeds on those three foods. Transportation costs are also up, she added, which factors into the pricing.
However, some supermarkets — like Wegmans — have taken measures to combat those changes.
“We committed in February to keeping prices of 40 items frozen, and to keep those prizes frozen through 2011,” Natale said referring to “everyday items” like bananas, ground beef, baby-cut carrots and some coffee products. Spread out through different categories, flavors and varieties, this impacted about 200 products, she said.
Natale said she didn’t know where the prices on those products would stand after 2011.
“Beyond that, we do our best to consider prices for customers,” she said. “We check competitors’ prices regularly as well.
A surge in food prices this year is affecting local restaurants and grocery stores, adding to an ever-growing expense list for business owners. But some are trying to keep their businesses from passing those increases along to customers.
The U.S. Department of Agriculture recently said it expects retail food prices to increase 3.5 percent to 4.5 percent this year, after climbing just 0.8 percent in 2010.
Nick Castronova, longtime owner of the Lamplighter Restaurant on Fetzner Road in Greece, says margins of profit for restaurant owners have decreased in recent years.
“Most of us in the restaurant industry are basically gun shy about raising our prices too much,” he said. “Our customers are going through the same economic problems that we are.”
Catronova said increased food prices compound with other factors that lead to smaller profits. “Food and beverage cost is the leading indication, along with labor and credit card fees, but those three things have seen our profit erode,” he said.
He says he’s seen a 40 percent increase in labor expenditures over the last four of five years.
The Lamplighter, known for its fine dining, has a menu with high-end items like angus beef and fresh seafood. Increases are passed on from suppliers, who are getting similar upticks from distributors.
The changing market leads to more shopping around, Catronova says.
“We’re kind of at the mercy of what the market will bear,” he said.
Supermarkets see similar problems. Jo Natale, the director of media relations at Wegmans, said a couple factors have led to the increase of food prices.
“Higher commodity costs, higher energy costs and a greater demand for food globally has contributed to driving food costs up,” said Natale. “Cost increases are pretty consistent across the board.”
She said that specific commodity costs that have increased include wheat, corn, soy and anything that feeds on those three foods. Transportation costs are also up, she added, which factors into the pricing.
However, some supermarkets — like Wegmans — have taken measures to combat those changes.
“We committed in February to keeping prices of 40 items frozen, and to keep those prizes frozen through 2011,” Natale said referring to “everyday items” like bananas, ground beef, baby-cut carrots and some coffee products. Spread out through different categories, flavors and varieties, this impacted about 200 products, she said.
Natale said she didn’t know where the prices on those products would stand after 2011.
“Beyond that, we do our best to consider prices for customers,” she said. “We check competitors’ prices regularly as well.
