Arizona restaurants feeling the pitch as inflation keeps guest checks and operating expenses high

While restaurants say the staffing and supply crunch is impacting their bottom line and menu prices, many are reporting that business is still doing well.
Published: Aug. 9, 2022 at 11:05 AM MST
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PHOENIX (3TV/CBS 5) -- With everything being more expensive, many people are trying to save money by not eating out as much. Instead, families are frequently saving that money for staples like higher rent and gas prices and the rising cost of groceries.

Such consumer behavior is impacting Valley restaurants as they’re already dealing with inflation issues of their own. The Arizona Restaurant Association’s Steve Chucri says they feel the pinch as restaurants compete for your dollars.

“You’re going to pay your rent, you’re going to pay your mortgage or car, whatever the case might be before you go out to dine at a restaurant. We are luxury experiences when it comes to your discretionary income. So as prices creep up, whether they be inflation related, or gas prices, we feel it inside our restaurants,” Chucri said.

One of those restaurants feeling the squeeze is the Original Breakfast House on 32nd Street and Thunderbird Road. Owner John Stidham says he’s paying more for food at his breakfast spot.

“For me, eggs have doubled. I’m spending $2,500 more a month on eggs than I did six months ago. Pork products, flour, bread, oils. Everything is up 20-30 percent,” he said.

Stidham said he did have to raise prices amid the higher costs. As for customers’ behavior, he’s noticed that people aren’t ordering as much.

Revenue Management Solutions, a restaurant industry analyst, says foot traffic at quick service restaurants was down 5.4%, according to its latest quarterly report. The meals cost more too, with the average check price up 7%.

Chucri said this is yet another wave the industry has to ride out. During the pandemic, he said Arizona restaurants lost about $2.7 billion in revenue. After that, he said the industry came back, but then inflation and high gas prices hit, taking a toll again.