Food inflation eating up profits at Saskatoon sandwich shops

Restaurants are still struggling with inflationary costs and one Saskatoon deli said even putting together a simple sandwich has been tough on the wallet.

“I kind of absorbed the costs myself and just let it ride,” said Bill Matthews, owner of Gangster’s Italian Sandwiches. “But then meats started going up, cheeses started going up, dairy started going up to the point where I had to increase the cost of my sandwiches.”

Gangster’s began as a food truck in 2017 before moving to a permanent location.

Matthews said rising prices began taking bites out of his profits in 2020.

“Lettuce was costing me a dollar a head and then it went up to $5 a head. I use a lot of beef brisket and that went from about $12 right up to $18.”

He said he raised the cost of his sandwiches by 25 cents recently when he couldn’t eat the costs anymore. The average cost of a sandwich at Gangsters is currently sitting at $11 to $12.

“You start trying to find other ways to use the meats as opposed to spending $18 and trying to keep my prices in line for my customers,” Matthews said.

“I just absorbed it to a certain point but now things haven’t gone 100 per cent back to normal.”

Matthews said he would be able to absorb a five per cent increase but anything above that would have to be passed on to the customer.

Building a sandwich at home is getting pricier, as well.

One loaf of white bread can build around eight to ten sandwiches.

Consider the price of a BLT, for example. According to the average prices listed from Statistics Canada, the price of bacon, lettuce and tomatoes can reach up to around $18.70 — over $3 more than in 2020.

“The one element that’s gone up the most, ironically, is the bread. Bread is up 17 per cent year to year,” said Sylvain Charlebois, director of the Agri-Food Analytics Lab at Dalhousie University in Halifax.

“When it comes to proteins, there is some shrinking going on. People are putting a few slices less into a sandwich just to make sure they are saving some money and replacing it with a more affordable ingredient.”

That is something Matthews said he will never do.

“I won’t skimp on my ingredients. I won’t buy cheaper ingredients. Quality comes first. I could charge a dollar more for my sandwiches right off the bat, and my customers would still come in because they like the quality.”

Charlebois said, as of right now, food inflation rates are dropping at slower rates, meaning prices will still rise, just not as rapidly.

“Food costs will become more manageable for the food industry, which means that we are expecting more deals to be offered to consumers for the next three months,” Charlebois said.

– With files from Global News’ Kabilan Moulitharan