A restaurateur behind 43 restaurants across the United States says he was forced to double price increases on the menu due to inflation.
Cameron Mitchell said while prices would normally be increased by 3.5% in any given year, he now had to increase them by up to 7%.
Cameron Mitchell Restaurants CEO, 75, says he has no choice but to take an aggressive approach as inflation remains stubbornly high at 7.7% after peaking 40 years old in June.
“In my 42 years in the restaurant business, this has been the worst cost environment I’ve ever operated in,” he told CNBC’s Squawk Box on Friday morning. “I’ve never seen this before.”
The price hike comes as Americans also brace for the highest gasoline prices on record for the Thanksgiving holiday season.
Cameron Mitchell owns 43 restaurants across the United States and said he had to double regular price increases from 3.5% to 7% due to inflation
October statistics – the most recent available – show inflation at 7.7%
Mitchell said ingredient costs are up 9.5%, and while staffing is almost where it was before the pandemic, hourly labor costs are up 10%.
As the company prepares to open four new locations in Tampa, Las Vegas and Columbus, the cost of construction has increased by 35%.
Mitchell said that although overall profits were down 8%, his restaurants were able to maintain strong sales revenue due to price increases.
“Our consumers are probably at their limit in price tolerance,” Mitchell noted, “but they know we have to charge more.”
The company has 23 restaurants in Ohio, including popular Avenue Steak Taverns and Cap City Fine Diner.
He also owns the Ocean Prime chain, which has branches in New York, Dallas, Boston, Washington DC and other major cities.
Mitchell said while his business stayed afloat, he worried about whether independent restaurants would be able to keep pace with high inflation.
“The cost has skyrocketed everywhere,” he said.
Mitchell said customers will no longer tolerate menu increases. Pictured are customers dining at Del mar Naples, Florida
Mitchell has 23 locations in Ohio, including the popular Lincoln Social Rooftop location in Columbus.
According to a Toast survey, which surveyed more than 900 restaurateurs, 36% of restaurants had to raise menu prices as a direct result of inflation.
The survey also said nearly 40% of restaurants had started tracking key ingredient prices and about 30% had replaced cheaper ingredients.
About 38% of respondents also said they had to adjust the number of food suppliers they use, and 31% said they had reduced the items offered on the menu.
A survey of more than 900 restaurant owners in the United States indicated that 36% of restaurants raised their prices as a direct result of inflation.
October statistics – the most recent available – show inflation at 7.7%. That’s down from the 40-year high of 9.1% recorded in June, though it continues to cause crippling increases in the cost of living for many Americans.
Meanwhile, several experts told Bloomberg on Thursday that they expected inflation to last at least another year.
They also warned that scaling back interest rate hikes too quickly could make the problem worse, convincing Americans the crisis was over.
They fear this will prompt them to loosen the springs of their stock market and cause prices to spike again as demand for goods and services soars.
New Bureau of Labor Statistics data shows cities where inflation is hitting hardest
In October, Phoenix reported an inflation rate of 12.1% on certain goods, the highest in the country.
A week ago, it was reported that inflation had moderated in the United States last month, a sign that the price increases that have hit Americans are easing as the economy slows and consumers are becoming more cautious.
Despite the good news, figures from the Bureau of Labor Statistics show that some cities are still considered hotbeds of inflation.
In October, Phoenix reported an inflation rate of 12.1% on certain goods. That’s down 0.9% from the city’s record 13% earlier this year.
Inflation is believed to hit the region the hardest, as Phoenix is also one of the fastest growing places in the country, which means food, gas and housing cannot keep up.
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