Six chefs and restaurant owners from across the country explain why restaurants feel so expensive right now, and how they’re coping with high prices and customer complaints
Dining out involves calculating the intangible: What is hospitality worth to you? On the one hand, you get the possibility of technique and flavor you cannot, or don’t want to, create yourself, plated and served with attention. On the other hand, going out to a restaurant means risking mediocrity or outright unpleasantness for which you still have to pay. Every meal is an attempt to solve for this unknown, with a different equation each time.
Lately, the calculus is becoming more complicated. Or maybe the answer just keeps shaking out in one direction. Everything feels so expensive. Every check is a shock. My friends and colleagues can’t stop talking about it, our personal and professional budgets strained to the breaking point. We are eating out less often. We are ordering less when we do. We recommend new places with caveats. “The food was great,” we say, “but.” Was it worth it?
As diners complain of expensive bills and stick with the familiar, restaurateurs feel their own squeeze. Margins are tighter than ever as restaurants try to balance higher costs of rent and ingredients, reservation site fees and insurance premiums, and paying fair wages, all while trying to keep prices at a level customers will actually pay. By many accounts consumer inflation is down, and sure, the GDP is up, but something isn’t working on either side of the restaurant equation. This isn’t a problem of one city or class or demographic. Things are feeling more expensive everywhere. That the price of food feels high is an issue acknowledged at even the top level of politics. We spoke to restaurants around the country about what their books are looking like: what costs more, who’s coming in, and how they’re making it work — or whether it’s working at all.
“There’s a cultural expectation in America around how much Vietnamese food should cost”
Vien Dobui, chef and co-owner of Công Tử Bột, a modern Vietnamese restaurant in Portland, Maine
“I’m going to be completely transparent; we filed for bankruptcy in December 2023. We might break even this year. Most of our costs go to labor; our restaurant is actually unionized, so our labor percentage is almost unsustainably high, around 50 percent. And that’s by design. When I am pricing our food, I generally take the highest-cost ingredients, and multiply that by a factor of three and a half to four and a half, and that usually captures my labor costs.
“That’s still not quite enough. Because there’s a cultural expectation in America around how much Vietnamese food should cost, especially if it’s not presented as fine dining. Right now, our bowl of pho is $26. We use chicken from Joyce Farms, and our broth takes three days. But if you look at our negative reviews they’ll say it’s $26 for pho, when they can get “comparable quality” for $10, which is just not true. Recently, we had a fried rice dish that was popular that used chinese sausage and red hot dogs made by a local company using nice beef, which were $9 a pound. And I couldn’t charge appropriately for it, because the expectation is that hot dogs are cheap. So we had to change it to shrimp, which is the same price per pound, but people were more willing to pay $27 for the dish.
“I’m not saying there’s not space for $10 pho, but there should be space for a range. And some of the most vocal critics have been Asian. I’m always like, Don’t you want us to get paid? It’s hard to showcase the value. And everyone is feeling the pinch. Recently, my wife and kids and I went to Applebee’s, and the four of us ate for $75. I felt good about the value. But I also knew someone along that chain is underpaid.”
“It’s important for us not just to be the expensive spot”
Cody McCain, co-owner and general manager of Elvie’s, an all-day cafe in Jackson, Mississippi
“Because we’re doing something more elevated, we do get a little bit more play with what the price is — we’re not trying to beat people to the bottom price-wise. Obviously prices have gone up in the past couple of years, but it’s helped us to focus more locally on what farmers have around us. Getting our ingredients locally has helped us with food costs, because it’s less affected by national trends. Our local eggs used to be more expensive than your typical eggs from a distributor, but now that margin has gotten slimmer, so it makes more sense to dive into what’s around us.
“It’s important for us not just to be the expensive spot. We want to be approachable. A lot of Mississippi, and Jackson specifically, is a food desert, so what’s sustainable is to be able to reach the people that are around us, to meet needs in our community. So we have to be creative on our menu. Instead of a filet for steak, we use a butcher cut that people aren’t as familiar with. But it’s cheaper for us to buy, and benefits our butcher to use cuts that are harder for them to sell. Customers are generally more attuned to the way restaurant pricing works, but you do get people who are upset that we’re charging for bread and butter. We have a local guy that makes our sourdough bread, and we make our own onion butter, and they’re like, ‘But I can go to this chain and eat bread for free.’ In those situations, it opens up some good conversation. You may disagree with how we price this, but here’s why we’re doing this.”
“I’m not going to start cutting quality as a way to roll back into profit”
Peter Hemsley, chef at Aphotic, a seafood-focused tasting menu restaurant in San Francisco with a Michelin green star
“San Francisco is going to skew a bit abnormal in terms of what you’re seeing around the country or even in other affluent areas. We’ve held ourselves back in terms of hiking the price of the menu, even though in the past year, we have done significant menu increases due to our reputation after earning a Michelin Green Star, and also, what we feel is the true value of the service that we’re providing: We went from $135 for a 10-course tasting menu to $200. To get our sustainable seafood, you have to physically get out there, establish contacts, provide materials, and communicate. It becomes exponentially more expensive. But [if] you take a look at the competition, our menu is actually on the lower end of that scale.
“People are still sticker-shocked. I think it just has to do with the appetite for spending on restaurants. We’ve definitely seen a downtick in a more happy-go-lucky, free-wheeling kind of clientele. But my fundamental belief is I’m not going to start cutting quality as a way to roll back into profit. We’ve only increased the quality of the plates we’re buying, the material assets that create the experience. When diners are spending that kind of money, they want an amazing experience. We have to compensate for that in whatever way we can with hospitality — hot towels, scraping crumbs off the table, never making a mistake about still and sparkling water — so they have that perception of value.
“I will say, we had a weird month when California legislation flip-flopped on a legislative mandate where hidden fees, including service fees, were going to be done away with, and we reverted to this old-school system of tipping. In that one month I saw some really bad tipping, because if you give people the choice to tip, they’re stingy. They will not go beyond a certain point.”
“When you’re the only vegan chocolate business in the game, everyone has to pay what you’re charging”
Lagusta Yearwood, owner, Lagusta’s Luscious Cafe, a vegan chocolate shop and cafe in New Paltz, New York
“I picked chocolate [to sell] from the beginning because I really wanted to overtly talk to customers about why it costs more — because you’re paying not to have child slaves, you know? So it was interesting when we got news that the price of our chocolate will go up 34 percent this fall. Even Hershey’s is going to have to raise their price, it’s an across-the-board thing, but the big three chocolate makers constantly say they’re working to end forced labor in their supply chain, and I’m sure this will be yet another excuse to not work on those programs. All of our chocolate is from Peru and Ecuador, which isn’t experiencing the same climate issues as Africa, but the global market is still being affected.
“I wrote a cookbook for vegan confections that came out in 2019, and in the past few years there’s been a real boom in plant-based food. As a vegan I love it, it’s like the world I wanted to see. But there are so many more players in the vegan confections space, so we’ve done a lot of soul-searching. There’s a lot of cheaper stuff available now, and we’re never going to compete with people who have a $10 million investment. So we’ve been contracting, seeing how we can be sustainable within our communities, and pay our workers well. I think we always provided really good jobs. We want our starting wage to be $24 an hour. But the cost of living has skyrocketed in the Hudson Valley in the past few years. When we first opened, everyone who worked at the shop lived right in the village of New Paltz and walked to work, and now a lot can’t afford that.
“With these chocolate price increases, it looks like we’re going to be increasing the prices of our pieces from $3 to $3.25. That much for a tiny piece of chocolate is a lot. When you’re the only vegan chocolate business in the game, everyone has to pay what you’re charging. But now that there are more options, you find out: Are people still attracted to that homemade, ethical ethos?”
“We can’t tell our guests we have to raise the price of food because rubber gloves are more expensive”
Garrett Benedict, chef and owner of G-Love, a vegetable-forward restaurant in Portland, Oregon
“Our check averages are usually between $60 and $70 per person. Our labor costs are about 38 percent, all of our costs are really within industry standards. But our food is on the expensive side. To me, that means we have to deliver on quality 100 percent of the time; that’s what will set us apart and create value.
“Our prices have risen substantially since 2020. Pre-pandemic, I was really proud of the fact that there was no food item on the menu at G-Love that cost more than $20. And now I would say 45 to maybe even 50 percent of our dishes are over $20. Protein prices have gone up exponentially. It’s good for us, because we’re a vegetable-focused restaurant, but there are other costs too. I remember in 2020, nitrile gloves went from costing $70 a case to over $400 a case. But we can’t tell our guests, ‘Hey, we have to raise the price of food because rubber gloves are more expensive.’
“We’ve been able to keep the same level of guests coming in the door and keep our revenue going because we’re so laser-focused on quality, instead trying to cut costs and compete with everyone on the cheap end. Like, we have a $25 roasted pork dish on the menu, but we serve 4 ounces, not your standard 12-ounce pork chop. People see the price and think it’s not too bad, and then they get it, and it might look a little bit small to them. But once they eat it, they forget completely about the price. I think people understand the value there.
“There’s definitely been part of our customer base that’s been turned off by price increases, but we have to do what we have to do. In the summer, because of our outdoor space, we’re operating at around $270K to $300K in revenue a month. But in winter that’s a much different story. We can’t operate at a loss. If that ends up alienating about 10 percent of our past guests, that’s the price we have to pay. Hopefully, we can find new guests that don’t have those concerns and are excited about the quality.”
“We can’t lose money”
Gehad Hadidi, owner of La Bonne Soupe, a classic French bistro in New York
“La Bonne Soupe was opened in 1973. It was a very simple concept, a casual French bistro mostly serving the Midtown lunch crowd. We always say we’re where workers go when they’re paying for their own lunch, not when they’re expensing it on the company card. So that limits our ability to increase prices much as some of our neighbors. But we pay people the same as everyone else, and our food costs the same as everyone else’s food. So it has been challenging.
“We’re known for our French onion soup, but the price of cheese has gone up so much — Gruyere has gone up over 50 percent since 2019. But also staples like canola oil, butter, and potatoes have become more expensive, by double-digit percentages. And we have to eat these prices. We probably have fewer people working at the restaurant than we did in 2019. Our staff’s prep lists have gotten a little bit longer, servers might have an extra table or two, and less support on some days. But we can’t lose money.
“We’re off Fifth Avenue, and near Central Park, so we have tourists that are coming. We get a lot of the office crowd. But it’s usually people looking for a cheaper meal than what else is in the area. But also, the office lunch crowd has changed a lot. You have more people doing flex work and not coming into Manhattan. And for the people that are here, they’re ordering dessert a little bit less, or being more cautious about having a second glass of wine, or not having a drink at all. You can tell people are more cautious of how much they’re ordering.
“One thing we implemented about two, three years ago, is a 2 percent kitchen appreciation fee. It’s printed on our menus, and 100 percent of that goes towards our kitchen team — in New York, the law is that tips can only go to front-of-house staff. But as an individual restaurant, there’s only so much we can do to really change the model. If there’s going to be a change to the industry, it probably has to come from government regulations that all of us have to follow at the same time. Otherwise, no one is making heavy margins, because if they do, people will see it as a rip-off and go to the place next door.”
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