It’s been a tough three years for restaurants in the Okanagan.
Many are still recovering from the COVID-19 pandemic while, at the same time, being plagued by a severe labour shortage.
“If you see a restaurant closed, it’s likely because they don’t have any labour,” said Ian Tostenson, president and CEO of the BC Restaurant & Foodservices Association.
Now, though, restaurants are dealing with another blow: Inflation.
“Inflation has been something that’s been really hard on our business,” said Meagan Keelaghan, general manager of DunnEnzies Pizza, which has three locations in Kelowna.
Like other restaurants, DunnEnzies is dealing with increasing food costs, which is having a major impact on its bottom line.
“We did a price comparison on our top-10 products that we purchased from January of this year to now,” said Keelaghan.
“The flour that we use for pizza, a 20-kilogram bag, used to cost $19 and it now costs us $42 for the same bag. The (jug in a box) of oil that we use for our fryers used to cost us $20, and now they cost $50.”
Rising food costs are forcing many restaurant operators to increase their menu prices. But according to Tostenson, at this point, they’re minimal.
“We’ve probably seen 8 to 10 per cent price increases across the board on most menus,” Tostenson said. “But it’s not too bad. I mean, if you’re getting a $15 hamburger, maybe it’s $16.”
Restaurants are in a tough position because while they have no choice but to pass on those added costs, they have to be careful not to raise prices too much and make it too expensive for diners.
“Trying to find that sweet spot to make sure that people can go out and not have too much sticker shock,” Tostenson said.
But in addition to the rising food costs, they’re also noticing a trend among diners who are reducing spending amidst the rising costs of living.
“We’re noticing guests are coming in less frequently now and their bill, guest-check average, is not as high as it used to be,” Keeghalan said.
“People might not be ordering the second drink, or they’ll order a glass of wine as opposed to a bottle or they’re just skipping the appetizers or dessert.”
According to Canadian researcher Maru Group, a recent survey revealed that 60 per cent of Canadians are reducing their spending.
Of those, 68 per cent said they were cutting back on food from restaurants dining out or ordering in.
On the streets of Kelowna on Thursday, people whom Global News spoke to echoed the survey when asked what things they were cutting back on.
“Going out for dinner, “said Ali Angus.
“Going out for dinners and things like that,” said Peter Thompson.
The B.C. Restaurant Association is hoping a pent-up demand to dine out following COVID lockdowns continues, and that it continues into the upcoming Christmas season.
“It’s only been the last sort of month,” said Tostenson. “The interest rates are sort of taking effect, so we’ll see what the thing is.
“But on the other side, we’re going into the Christmas season. People tend to spend a bit more, so we may just be lucky.”
At DunnEnzies Pizza, the operators say that when people choose to dine out, they hope they’re intentional about what places they select.
“To choose locally, to choose businesses that are in their community,” Keeglaghan said.
Tostenson added that the restaurant industry has shown it can survive challenging times.
“The industry, as it showed during the pandemic, is still resilient, ” he said. “And it’s not easy.
“Those are our guests and we’re in hospitality, and it’s our job to make sure that they have value in front of them every time they come in.”
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