Think about it this way: most restaurants likely face four primary costs of operation:
Materials (i.e., food ingredients)
Labor (waitstaff, kitchen staff)
Utilities (natural gas, electricity)
Rent (unless the restaurant owner owns the property themselves)
All four of those costs have gone up substantially over the past one to three years, particularly over the past year-plus, thanks to inflation and rising interest rates. Those cost increases are almost undoubtedly going to be passed through (to a greater or lesser degree) to the patron, through higher menu prices.
They do it because they can, no other reason. I had someone drag me kicking and screaming to Whole Paycheck, I mean Whole Foods recently. They wanted $5 for ONE bell pepper. I told her just don’t buy it. If people stop buying these things, trust me, they will lower the prices. If I had a restaurant I would change the menu instead of passing these crazy prices to my customers.
Better yet, buy a bell pepper for $1 at a non-yuppie grocery store, take it home, get the gazillion seeds out, and grow your own in the backyard or on a window sill. They are very easy to grow. Same w/ 'maters. Water, sun and dirt, and they will taste like real ones.
Ok, so what are you doing different now in 2023 than you were in 2019?
That’s the point I’m trying to make - nobody’s masking, social distancing, etc… anymore. Except for the absurdly risk-averse, and those with medically fragile people at home. People are either vaccinated or they’re taking their chances, and the vast, vast majority of both groups have had COVID at least once.
So with that in mind, what’s different about the way people are behaving in 2023? Nobody’s working from home out of fear of COVID; most of us would rather just not go into the office because it’s a pain in the ass. Nobody’s not eating out, nobody’s not going to big gatherings like church, sports events, academic competitions, etc…
A lot of that is highly dependent on where you live. Tomatoes and smaller peppers like jalapenos, serranos, and pequins are fairly easy to grow better than what you get at the store, but bell peppers aren’t- I think it’s the amount of water and heat required.
Also, most grocery store foods are hybrids, meaning the seeds won’t grow true. You want to get one of those spiffy heirloom varieties somewhere like Whole Foods or your local farmer’s market, and then plant those.
In a broader sense, I’m aware that restaurants charge what the market will bear, but I’m also aware that most of them have painfully thin margins. So that’s why I was curious what was driving prices upward.
I’m talking like fast casual / counter service type places- like say… Five Guys or somewhere like that. They hadn’t been $20 a person prior to the last six months/year- maybe $10-15 at most.
I would have always expected $20 a person for a decent restaurant.
Pretty much the same response to this. Regardless of what you believe or how people are behaving, covid is still the third leading cause of death, covid cases are now regularly at levels we used to consider scary surges pre-omicron, and long covid is affecting wide swaths of the population. Not surprisingly, widespread death and disease has economic implications.
Tomatoes are trickier, because most commercial tomatoes are hybrids, and probably won’t “come true.” Peppers, whether sweet or hot, are a better bet if you want to use the seeds.
“Post-pandemic” doesn’t mean things have returned to how they were before the pandemic, any more than “post-apocalyptic” means that things have returned to the way they were before the apocalypse.
Since the trough of the COVID-19 recession in the second quarter of 2020, overall prices in the NFC sector have risen at an annualized rate of 6.1%—a pronounced acceleration over the 1.8% price growth that characterized the pre-pandemic business cycle of 2007–2019. Strikingly, over half of this increase (53.9%) can be attributed to fatter profit margins, with labor costs contributing less than 8% of this increase.
If “record corporate profits” are a factor in why the local mom-and-pop restaurant, or the local Five Guys franchise (as the OP noted) have prices that are way up, it may well not be that the restaurant owner suddenly got greedy, but that they are paying more for what it costs them to put a meal on the patron’s table.
For fast food, I suspect it’s mostly wages almost doubling due to low unemployment and not a little well deserved social shaming. The cost of a fast food meal in the US was ridiculously low until the last decade or so.
The problem is Russia was the main supplier of natural gas to Europe and they closed the spigot. Before the Ukraine invasion, Russia supplied most of Europe’s gas needs, now the US and Canada are supplying about 50% of that need. That has caused the price of gas here to climb a bunch. For January of 2022 the gas portion of my power bill was $36. For January of 2023 it’s now $141 and is expected to increase as the worldwide demand increases. My last power bill even advised that more price increases will be coming and has a list of ways to save money like switching to electric water heaters and keeping your house at 66 instead of 72 degrees.
I don’t know of too many people getting wealthy in the independent restaurant biz. I will note that Wal-mart is apparently paying $23/hour for night stockers, plus benefits. That’s some serious wage pressure.
What you describe matches what I experience where I live. COVID does not influence my own day to day decision-making iota one, and apparently neither does it influence the decision-making of 99% of the folks I see out and about. Although admittedly, neither you nor I can see how many people are COVID hermits or semi-hermits. It might be a much larger fraction than we imagine.
But as a frequent traveler I can assure you that some parts of the USA are still much more uptight, masked, stay-at-home than others. They’re living almost like it’s still early 2021.
Sure, you can grow your own veggies. When we discussed it, my gf calculated what an hour of her time is worth. We cannot afford to grow veggies, they’re cheaper to purchase even at an inflated price. Maybe after retirement.
Most local mom and pop shops have been struggling on razor thin or even negative margins for decades, terrified of raising their prices for fear of losing customers.
Generally, increased costs didn’t get passed on to consumers, they were absorbed partly by labor, and partly by taking an even smaller sliver of profit.
Now that they have an excuse to raise prices, they don’t want to raise them to the minimum they can to squeak by again, knowing that their costs will continue to rise, and that further cost increases will drive away more patrons than just one big one now.
So, it’s not just what costs are now, but a combination of what owners anticipate costs being in the future, as well as inflating their profit margin enough to start getting ahead a little bit after falling behind for decades.
All of which is not only true this time, but is commonplace during the early states of any inflationary period. A fact folks who didn’t live through the late 1960s - early 1970s may not fully appreciate. And it’s generally true in all industries.
During low/no-inflationary periods there’s lots of “holding the line” on prices, and of using shrinkflation or reduced features, or cheaper parts / suppliers / ingredients to hold that line. Then there’s a psychological sea change, where suddenly everyone, consumer or producer, buyer or seller, realizes that inflation is on and it’s real and it’s on-going. Suddenly it becomes a race the other way, to get ahead of the curve by raising prices quickly, rather than a race of slow bleeding to hold to the old price line better than your competitors.
That is one of the dangerous things about inflation. The macroeconomics are one thing and are susceptible to lots of monetary & fiscal policy levers. But the group psychology of the consumers and producers is a separate beast that believes what it wants on a timeline of its own choosing. And it can be obstinate in sticking to a belief long after that belief has been overcome by changing facts.
But at the same time that belief has a lot of power to create facts of its own. It can be a very unhelpful feedback loop.
I’d argue that the only real reason to grow your own, outside of doing it because you enjoy it, would be to get varieties of vegetables that you can rarely get, or that are significantly better when you grow them yourself (and pick when actually ripe). Or, I suppose, when whatever it is happens to be expensive in stores, but easy to grow where you live. Okra is the example I’m thinking of- stupid easy to grow around here in the height of summer, but still somehow kind of pricey and beat-up at the grocery store.
Tomatoes are popular for that reason. So are all sorts of hot peppers. But bell peppers? They’re a lot of work to get to grow close to as large as the commercial guys, and they don’t actually taste any different. Same for a lot of other staple vegetables; unless there’s a ripening issue like there is with tomatoes, it’s going to be difficult to grow your own to the same standards that the commercial guys do.
We have a little garden where tomatillos grow with zero input from us. They’ve been self seeding for years, and all we do is dump manure on in the fall. Zero effort and we have more tomatillo salsa than we can eat.