Restaurants raising prices as supply chains struggle to meet demand
LUBBOCK, Texas (KCBD) - As the country returns to more pre-pandemic rituals, supply chains are struggling to keep up with demand putting business owners in a tricky spot.
That means, you may have noticed your usual order at your favorite restaurant has increased in price.
“I don’t know what to tell people. Is there hope at the end of it? How high does it go?” co-owner of The Bent Nail, Jordan said.
At the restaurant on 98th and Slide, you’ll see a new message on the door that reads in part:
“Dear guests, due to the rapidly increasing prices of raw meat and ingredients... we are having to raise our prices.”
Jordan says the business was operating at a loss for two weeks before he made the tough decision to bite the bullet.
“It seemed wrong. And I told everybody, it seemed wrong then it seems wrong now. It’s not what we want to do, but it’s what we have to do. I don’t have a choice,” he said. “We found out from our meat supplier that meat was going up very quickly... It got to like, $4.69, $4.79, $4.89. We hit the panic button.”
But he is not alone.
Restaurants across town and the country are having to do the same.
“This is exactly what you expect when demand rushes out and [people say] I want to buy things. And firms, businesses say, well, I want to sell you things but I don’t have it yet and so the only thing that can happen is prices go up,” Michael Noel, an economics professor at Texas Tech, said.
Noel says what we are experiencing is due to being on the other side of the pandemic.
At first there was too much supply and not enough demand.
Now it is the other way around.
Price increases are now happening across the board. From chicken wings, to barbeque, to produce and more.
For the meat industry, not only did production slow over the last year and a half, but the effects of February’s winter storm are still felt today.
" [It] caused a number of shortages including fertilizer and including feed, which you need to actually feed animals or to grow crops,” Noel said.
For Jordan, that means his smoked meats went from $21 to $29.50.
A rack of ribs? $36, $8 more than usual.
According to economists it could take months before prices drop back down.
“As supply catches up with demand,” Noel said. “These imbalances will eventually work themselves out.”
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