Inflation sits around 8%, the highest it's been in 40 years. As a result, everything costs more, including food. And the restaurant industry is feeling the pain. That includes Greg Amsler, the owner of Salt Creek Grille in Valencia. KCRW talked to Amsler in November 2020 about how the restaurant fared following the news of a LA County-ordered outdoor dining suspension.
After fully reopening last year, Amsler says the restaurant was making record-breaking sales. However, when inflation kicked in, he immediately saw foot traffic drop. Customers started skipping the appetizers and ordered more luxurious items such as steak and full bottles of wine. He’s now been forced to raise prices. That includes raising the cost of a steak by 25-30% and other items by about 10%.
“We get into a point where the margins are so small in the restaurant industry that our prices keep going up. We pay for the raw product,” he explains. “That margin between the ceiling of where you can put your prices at and what you're paying, that gap is getting smaller and smaller.”
He attributes the price increase to farmer costs that are passed down.
“Take gas prices. The farmers need gas to plant their crops, to harvest their crops. Once the crops are harvested, there's gas in the transportation companies that used to take it to the suppliers. Then the suppliers have to use gas to take it to the individual restaurants. So when gas goes from $4 a gallon to $7 a gallon, you're looking at a 75% increase or whatever that might be in that cost. And that cost all gets passed on to the customers, which is us. And then we, in turn, have to pass at least a portion of that on to our customers.”
So far, Amsler says he hasn’t received any complaints. But customers have noticed.
“You get some people [say], ‘Boy, I wish I had the good old days where I could come in and have a bottle of wine with my wife, two steak dinners and still not spend $80, $90, $100.’ But for now, those days are gone.”
To help out his employees, Amsler says raises have gone to non-tipped employees to help them survive.
“I can't imagine this going on indefinitely. It’s just unsustainable. Gas prices have to level out. If it doesn't at least level off in the near-term, you're probably going to see a lot of smaller mom-and-pop, independent restaurants go by the wayside.”
