Oct 7, 2022 - Food and Drink

Richmond restaurants struggling to stay open

Illustration of a piece of steak on a flat top grill in the shape of an upward trend line

Illustration: Sarah Grillo/Axios

Across Richmond, many restaurants are raising prices, and some are adding fees to try to weather the latest challenge to an industry badly battered by COVID-19.

  • At the same time, some owners say they're cutting their salaries and taking a loss on menu items to try to minimize the consumer hit.

Why it matters: Some restaurants won't survive the rest of the year, owners warn — and will follow the rash of recent restaurant closings, like Perch, Secco Wine Bar and Kitchen 64 — if conditions don't improve.

What's happening: Nationwide, the two biggest costs for restaurant operators — food and labor — are up by 21% and 18% respectively, according to a mid-summer survey of restaurant owners by the National Restaurant Association.

Meanwhile, 62% of operators say total sales are still down from pre-pandemic numbers, per the survey.

What they're saying: "Sometimes you feel like Rocky Balboa. You've just come out of getting the s--t kicked out of you, and you still have more rounds to go," Brian Moore, who owns Chez Max, tells Axios.

Zoom in: In addition to labor and food costs going up, Gooch tells Axios that his linen bill recently doubled and his utility bill is up 30%.

  • Gooch said he's "laser focused" on cost now, eliminating things like takeout at one restaurant where the numbers didn't work.

David Bender, who owns Sheppard Street Tavern, said delivery fees and surcharges for fuel got so high that he cut off some services and now makes a weekly trip to Restaurant Depot to pick up product directly.

  • He also just raised prices across his menu by about $1 per entree.
  • "I can't charge what I would need to cover the real cost; no one would pay $18 for a burger," he said.

Threat level: Raising menu prices too drastically — by even 10-13% — would likely trigger a tipping point that turns the consumer away, a new study out last month found.

  • "It's human nature to get conservative about spending when prices go up," Moore said.

Moore raised prices at Chez Max by a few dollars or less per item and is focusing more on customer experience, taking fewer reservations to ensure every table gets full attention and wants to come back.

  • "I might lose a little money in the short-term, but hopefully we'll get through all this," he said.

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