Food inflation is taking its toll on both customers and restaurants

The Street

Inflation might be leveling off, but the price of food is still higher than what both consumers and restaurateurs would like.

Transcript

00:00Inflation is coming down, but food inflation is still a problem.

00:04The cost of eating out is 4% higher than it was a year ago,

00:08while eating in is up less than a full percent.

00:12So we're out here asking people,

00:14how is food inflation impacting their dining habits?

00:18Well, we used to really enjoy going out to eat probably too much.

00:21I don't go out to eat as often as I used to.

00:24I spend as much as 40 bucks for, you know, something healthy.

00:28We can't go out to eat too much. We have two kids.

00:30So we stay, you know...

00:32Very rarely do we go out anymore.

00:34Yesterday I got a salad. It was like $15,

00:36which is ridiculous to spend every single day.

00:38I don't really spend a lot of money outside

00:40because it's really expensive outside.

00:42Life is short, so you got to pay the extra money.

00:45It's just the VIG for living in New York.

00:47And some diners are noticing

00:49not only are restaurants going up on their prices,

00:52they are also cutting back on the portions.

00:55Portion sizes are down. Prices are up.

00:58One thing I notice is that the quantity that you get,

01:02I mean, each of the quantity is smaller than it used to be.

01:05I just remember, like, years ago,

01:07like, I would order something, like an appetizer.

01:09An appetizer would be enough to feed, like, the whole entire table.

01:12Now it's like an appetizer is so small,

01:14it's like for one or two people.

01:16You're not getting what you're actually paying for,

01:19especially because everything is so expensive now.

01:21Charge the same amount, give you less,

01:23or keep the same amount, charge you more.

01:25But that's capitalism, right? What are you going to do?

01:28But food prices aren't just hurting the wallets of consumers.

01:31The people serving up the food are feeling the pinch as well.

01:34We went to Charles Pan Fried Chicken here in New York City

01:37to speak with head chef Cui Slobart

01:39about the tall rising food prices are taking on the business end.

01:45So, as of right now, food prices are skyrocketing.

01:49We are at Charles Pan Fried Chicken.

01:51We are known for chicken, and that is like a roller coaster.

01:54It starts off high, and then it goes high,

01:57and it comes back down to being high, and it goes even higher.

02:00It affected me how?

02:01Because we are in the middle of Harlem.

02:03This is 145th Street.

02:04We do not want to raise the prices too much.

02:06We want to make sure we feed the average family.

02:08We want to make sure we feed the average consumer.

02:10This is 145th Street.

02:11We do not want to raise the prices too much.

02:13We want to make sure we feed the average family.

02:15So we just have to cut corners everywhere else.

02:17And that's by meaning materials.

02:19And here's Con Edison.

02:21Make sure we cut the Lysol.

02:22Something as simple as that.

02:23Tissue.

02:24Something as simple as that.

02:25But we do not skip when it comes to the food and the ingredients.

02:27We keep it the same way.

02:28It affects everybody.

02:29Labor.

02:30We are very cautious in how we do labor,

02:32and that's where we can control the most.

02:34We can't control the rent, but we can control the labor.

02:36We can control the food cost, meaning not ordering so much.

02:39And we can actually control the supplies we purchase.

02:42So being mindful on the other stuff that we can control,

02:45because food prices are killing us.

02:48How have you been forced to tweak the menu

02:53in order to prevent you from having to raise prices?

02:57Any high-priced items, we will still provide.

03:00Like lamb chops.

03:01I would love to have jerk lamb on our table every day,

03:03but we just can't have it out because the normal person

03:06won't come in and buy a lamb chop for $7.

03:09We work in family all around us.

03:11This is actually the community.

03:12I can't sell you one lamb chop for $7,

03:14and that's going to fill up food.

03:16So that's the only tweak, so to say, we did.

03:19If you want to say tweak.

03:24So you have economies of scale, right?

03:26Because you have three restaurants.

03:28Yes, we do.

03:29So you're able to go to your suppliers and be like,

03:31hey, I'm supplying three restaurants here.

03:34Give me the best price you got.

03:36And this is what it is.

03:37You have Starbucks.

03:40You have McDonald's.

03:41You have places like that that's all over.

03:44So that's what they do.

03:45And they get the lowest price of everything.

03:47That's why the food is so cheap.

03:48Now, mind you, we are Harlem.

03:50We have three locations only.

03:51So I'm using that same marketing manager style

03:54to try to get a better price on everything.

03:56Thank God for the community they are buying our food,

03:58so we have that buying power right now.

04:00But it's not as much.

04:01It's not as much.

04:02If you go to a Popeye's, they're all over.

04:05If you go to KFC, they're all over.

04:06So they're getting a better price than I'm getting

04:08on chicken hands down.

04:10But right now, we're scaling up.

04:12We're buying more.

04:13So I'm using our little buying power

04:15to try to get the best deal.

04:16So you mentioned McDonald's and Popeye's.

04:18And even though you're not in the same segment

04:21of the restaurant business or the food business,

04:25when they go low, does that put pressure on you,

04:30on restaurants like you, to match these low prices?

04:33Our prices are set for our community.

04:35You know what I mean?

04:36You come in here, we have the lowest price in Harlem

04:38when it comes to the plates.

04:39Lowest price.

04:40But we're even lower than that.

04:41$18, you get three pieces of chicken,

04:43two sides, and a cornbread.

04:44We went to a $10 combo special.

04:47Classic.

04:48Not because of McDonald's, not because of what's going on.

04:50It's because we want to make sure we feed our community

04:52because not everybody can afford it.

04:53So it was no competition.

04:54When they do, they fight out of meals

04:55because you're getting real food here.

04:58So you mentioned little tweaks on the menu.

05:01I'm wondering, in the overall business model,

05:04have you had to make other changes?

05:05Maybe you had to switch to a different kind of container

05:08or a cheaper set of utensils.

05:11It's not just the food inflation that's hitting you.

05:14You're getting hit from all these other places as well.

05:17Yes.

05:18When it comes to the clam folds,

05:20it was a month-long debate on what we were going to do

05:23when it comes to the cost of goods.

05:25You know, we have the cups.

05:26We have the biodegradable of this.

05:28We have this, we have that.

05:29We have paper, we have plastic.

05:30Honestly, if we went all plastic,

05:33it would have been way cheaper.

05:34But bad for the community, bad for the environment.

05:36So we actually have the biodegradable clam folds.

05:39We actually have paper bags.

05:41You know what I mean?

05:42Try to give back.

05:43The little two cents that we spend more

05:45will help out our world.

05:46I know, I grew up watching Captain Planet,

05:48so don't hurt me.

05:49He was my hero.

05:50So we actually spend this little extra

05:52because in the long term, it's better.

05:54You know, you go home, you get a cheap fork, it breaks.

05:57It's horrible.

05:58You get a box that just bends in and gets all watery.

06:01You're not going to like it.

06:02So it's a juggle when it comes to it.

06:04So we did the best that we could

06:05and got the best prices that we can.

06:07So we keep it good.

06:08We've got to keep the quality up there.

06:10What's hurting us, that's what's hurting us.

06:14Rent, that's what's hurting us.

06:15For those things, you can't really change.

06:17I was born in Harlem.

06:18I was born in poverty.

06:20I'm used to being tight.

06:21My mom made it.

06:22She had three kids, one job.

06:23She made it happen.

06:24And we're making it happen now.

06:25So every dollar counts.

06:26Everybody that comes through these doors

06:27and buys something, amazing.

06:29Thank you, because as you're seeing these questions,

06:31I wish I could tell you a secret.

06:32I wish I could tell you a trade.

06:33No, we are living check by check in that sense.

06:37That one person, I don't care what she buy.

06:39I thank her for walking through those doors.

06:41This is the process, literally.

06:43Put the chicken in, and we constantly turn as we cook it.

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