Dec 4, 2023 - News

High costs strain Ohio restaurants

Illustration of a knife and fork next to a plate in the shape of a grimacing emoji.

Illustration: Shoshana Gordon/Axios

Rising food and labor costs are seriously eating into restaurants' profits, operators across Ohio reported in a recent industry survey.

Why it matters: High costs put a strain not just on owners' pocketbooks but customers', too.

Driving the news: The Ohio Restaurant Association has conducted quarterly "business impact" polls of operators since the beginning of the pandemic.

  • The latest was taken between Oct. 17-Nov. 16.

Here are a few takeaways from the survey and our conversation with ORA president and CEO John Barker:

🍔 Customers are also paying the price

Nearly all restaurateurs report facing higher food and labor costs (95% and 88%, respectively) compared to the beginning of 2023.

The big picture: Inflation has hit restaurants and consumers hard in recent years, with a stream of supply chain disruptions, global conflicts and high energy costs contributing to higher food prices.

What they're saying: "It's still a very stressful period for operators, particularly mom-and-pops and smaller restaurants that don't have as much scale," Barker tells Axios.

Between the lines: Most restaurants (60%) say they're raising menu prices this quarter to mitigate higher costs.

  • Plus: Some restaurants now charge "inflation fees," and Barker says he recently dined at a High Street restaurant that charged a "health care fee" to pay for labor benefits.

❌ Businesses will fight a minimum wage increase

Few operators (16%) support a proposal to raise the state minimum wage to $15 per hour.

State of play: Ohio's minimum wage gradually increases each year, currently sitting at $10.10 per hour for non-tipped workers and $5.05 for tipped workers.

What's happening: Raise the Wage Ohio, which argues the minimum wage isn't increasing fast enough, proposes a constitutional amendment to raise the hourly minimum wage to $15 by Jan. 1, 2026, and eliminate the lower tipped wage by 2029.

  • The group is gathering petitions to place it on the November 2024 ballot.

The other side: ORA will publicly campaign against the amendment if it gets placed on the ballot, Barker says, adding that operators see a tipped wage "as foundational to their business models."

😬 It's bad news when the Bucks lose

Fans like to keep the party going when Ohio State wins a big football game, but often cut it short after a heartbreaker:

An image of a tweet by local writer Craig Calcaterra about restaurant-goers canceling reservations after Ohio State loses a football game
Local writer Craig Calcaterra, via X.

The intrigue: "This tracks," Barker says, though he thinks it's probably more true for casual dining and bars.

  • "I'd say the higher-end the restaurant, the more they'll continue to go to it" after a loss.

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