Dining out will become dearer as inflation hits restaurants

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(RNZ Photo)

Amy Williams
Wellington, June 28, 2022

Dining out could cost a few extra bucks as the cost of living and a dive in consumer confidence hits a sector on the rebound from a string of Covid-related lockdowns.

In a survey just out, restaurateurs say that they are worried that customers struggling with the cost of living will stop dining out, yet many businesses need to increase menu prices to cover soaring food prices.

The Restaurant Association asked its members how food prices were affecting their business, with 80% saying that they had adjusted their menu prices and half saying they were absorbing the costs.

Suffering hospitality sector

Chief executive Marisa Bidois said that restaurant owners, already struggling after Covid-19 lockdowns, feared that the cost of living would reduce customers’ ability to dine out.

“There is some concern out there in the industry that people may pull back their spend in the dining space. We are hopeful that that does not happen because these businesses are still recovering from the last two years of subdued trading. ‘With the writing on the wall and the prediction that these increases will continue I do think it is safe to assume that we will see some increased pricing across the board in our sector,” she said.

Plates of seared eye fillet fly out the kitchen door at Tony’s Restaurant in Henderson, Auckland.

Marisa Bidois, Restaurants Association Chief Executive (File Photo)

Chef and owner Chris Sinclair orders about 70 kilograms of the steak each week but said the price was eye-watering, jumping by half in a short time.

“We have just absorbed it because I am acutely aware of what other places are charging and we would damage our trade if we increased above what our competitors are charging. People are aware of the costs of things and there will be a number of people who think twice about going out as often,” he said.

Increasing prices

Forget about crying over onions – chefs are tearing up over cooking oil which has doubled in price.

Sinclair said his two deep fryers took 30 litres of oil each, costing him $240 a week, but he was still loathed to increase menu prices.

“People will have to increase their prices, unfortunately, that has the flow-on effect of discouraging people from going out as often, so it is a bit of a double-edged sword.”

He said that bookings were still patchy but had picked up under the orange light Covid-19 setting.

Of the Restaurant Association members surveyed, 70% said that prices were going up across the board with dairy, dried goods and meat the main mentions.

Auckland restaurant Pici specialises in pasta and uses 60 kgs of semolina a week – the price of semolina has doubled.

Chef and owner Jono Thevenard said that its New Zealand grower of durum wheat was so far shielding the business from that particular cost increase.

“We put the prices up earlier this year and we are just watching our food costs at the moment, and they have gone up a bit, but we are just trying to also change our menu to keep it super seasonal and not get too outrageous and try and keep things tight but it’s looking like we’ll have to put things up again this year,” he said.

Even so, he said general food price increases were unavoidable.

“I think that there is a potential storm coming especially for more high-end restaurants because people are not going to be able to afford so much going out. Our lower price point potentially could be an advantage during this period,” he said.

Amy Williams is a Journalist at Radio New Zealand. The above Report and pictures have been published under a special agreement with www.rnz.co.nz

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