Restaurants try to wait out squeeze from gas prices
By Bonnie Edwards
Published in News on August 18, 2008 1:36 PM
Paying high food costs while trying to keep customers coming back has put the squeeze on area restaurants.
News-Argus/Bonnie Edwards
Steve's Pizza manager Joe Talton charges a $2.50 fuel charge for deliveries, and it goes straight to the driver, but that is not even enough for a gallon of gas.
The economy caused the former owner of Steve's Pizza to raise menu prices and to cut back on labor -- a must, manager Joe Talton said, because of the high cost of diesel used to deliver pizza ingredients. One of Talton's suppliers who has been coming every week wants to come once a month to save on fuel.
And these high fuel costs have been passed on to the suppliers' customers.
"A bag of flour went from $25 to $35 in one week," Talton said. "Cheese is $80 for a case of small bags of shredded. Back in the day, you could get it for $55 or $60. Everything is going up but the pay."
The new owner at Steve's Pizza has dropped some of the prices back down, but he has had to cut back on labor costs, too. And Talton is having to watch how many hours the delivery man is working.
Times are tough for the Pizza Inns, as well. In the past two or three years, Pizza Inns' electric bills have tripled, said Jill Nielsen, marketing director for Diversified Foods, which is the parent company of the Pizza Inns in Goldsboro. Mrs. Nielsen is the daughter of H.M. Poythress, who founded the Pizza Inns.
"We're between a rock and a hard place," she said.
But this is not a time to make any drastic changes, she said.
"The Pizza Inns are not changing anything. If we raise the prices, we lose customers. If we cut employees, we lose quality of service," she said.
Pizza Inn employees are trying to keep on eye on some expenses to lessen the impact of increased costs. Mrs. Nielsen said.
"We have to pay closer attention to the things we can control like turning off the lights and not leaving doors open in the summer and winter," she said. "You can't close your doors, and you hold on the best you can. It's turbulent. I hate it for the mom and pops. I don't see how they're doing it."
Royal Bangkok owner Sam Denpatrapreecha is hanging on and watching for ways to save money -- and to reach more potential customers.
"We're advertising more aggressively to let more people know us," he said.
Royal Bangkok participated in the Taste of Wayne.
"We try to do the best we can to go everywhere we can," he said.
Denpatrapreecha has noticed his regular customers coming in less often. Those who were coming in three times a week are now only coming in once or twice.
"They've had to balance the budgets. They're coming less to save the money, but they still love our food. They still come. They're just trying to balance the budget," he said.
But he, too, is keeping prices and portions the same, for now.
"We'll find a way to go on," he said. "We'll keep everything the same, same size menu to keep everybody happy."
That's what Cipriano Illiano is doing at the restaurant that is named after him.
"The cost of everything has gone up.... Food cost is up 10 percent. But I won't raise prices. I'm doing everything the same, thank you, God... If you raise the price, people will stop coming. I'm staying the same," he said.
It's a battle for everyone right now, and that is especially true for those in the food service industry, Mrs. Nielsen said.
But she and other area restaurateurs are keeping a positive attitude and waiting for better times.
"The experts say in the first quarter of 2009, we'll be getting back to normal," she said.
Meanwhile, she and her managers are shopping for price when they order food and supplies.
"It's sad," she said. "Dad says it's the worst he has ever seen in the 40-plus years he has been in the food business. When you've been in the business that long, you've seen the roller coaster ride, and you still have to maintain that high quality standard.
"And when things get better, the customers will come back to you. It's going to get better. This can't last much longer."