Calgary restaurant owners say they are being forced to raise menu prices and cut staff hours due to rising food and material costs.
Since the start of the war in Ukraine, the cost of living has soared for millions around the world — and Calgary’s restaurant industry is feeling the pinch.
Carolina De La Torre says inflation has been causing problems for her business since last winter. She is co-owner of Arepas Ranch, a food truck and catering service in Calgary.
De La Torre has run the food truck with her husband, Phanor Viera, and their daughter, Karen, for six years.
Through their business, the family introduced many Calgarians to the arepa: a traditional dish from Venezuela and Colombia.
But the prices of some essential arepa ingredients, such as corn flour and canola oil, have fallen victim to inflation.
“It’s tough for the business, it’s really tough,” De La Torre said.
The food truck owner says she tries to cut costs where she can so customers don’t see a significant increase in menu prices.
De La Torre said the family business tries to source more local and seasonal produce from farmers’ markets. They also go directly to wholesalers for certain ingredients.
But even with those savings, De La Torre says the company has had to raise the price of most items on its menu by a dollar.
Skyrocketing gas and propane prices add even more financial stress to the food truck’s bottom line.
Stay optimistic, rely on customers
Rising food prices forced Arepas Ranch to change some of its recipes. The price of yuca, a root crop, nearly doubled, according to De La Torre, so the food truck replaced that ingredient with the cheaper option of plantains.
Avocados are also more expensive, so the company rations its guacamole more carefully than before.
However, as their profits have plummeted over the past six months, the family remains optimistic.
“We went through the pandemic and it was really tough. So now it’s inflation, and we’re going to go through that as well,” De La Torre said.
The family doesn’t have the option to just stop running their food truck, De La Torre says. For one thing, summer is peak season for food trucks, and the company has several catering contracts it can’t let go.
Arepas Ranch customer Daniel Paez says inflation won’t stop him from visiting the food truck.
“If we want to move the economy and help everyone, each other, we have to help small businesses as well,” he said.
De La Torre says most people understand why menu prices are rising, and so far Arepas Ranch hasn’t seen a drop in customers.
Small profit margins get smaller
In an emailed statement, Restaurants Canada said food prices in retail stores rose 10.1% between June 2021 and June 2022.
The organization said that according to restaurateurs, menu prices are expected to increase by 7.8% by the end of 2022 compared to the end of 2021.
This is the largest increase in menu prices since the introduction of the GST in 1991, according to Restaurants Canada.
Ernie Tsu, president of the Alberta Hospitality Association, says restaurants have no option at the moment but to raise prices. Profit margins already aren’t that high in a regular year, said Tsu, with an average Canadian restaurant making about 5-7% profit.
“Coming out of COVID was already difficult,” Tsu said. “For these local entrepreneurs and owners in the hospitality industry, they now have to move the needle with inflation to try to stay alive and stay as humanly profitable as possible.”
Now, restaurateurs must be creative to retain their customers.
Tsu said many restaurant owners he spoke to tried to work more with local suppliers to keep ingredients fresh and seasonal.
He also said some restaurants are opting for healthier dishes or offering more vegetarian options.
Reduce staff hours
Red’s Diner, a Calgary restaurant chain, has also raised prices in recent months. But according to its general manager, changing menu favourites, or reducing the portions and quality of ingredients, is simply out of the question.
Logan Campbell says the restaurant’s most popular menu item has risen about $4 in the past five months.
The general manager said the restaurant chain has been using paper menus recently because they have to reprint about every two months to update prices.
“Every day we monitor sales hour by hour, to see if there’s a way to monitor our work and see if we need that many bodies,” Campbell said.
Campbell said the restaurant now schedules staff in 15-minute increments rather than hourly or half-hourly to save some costs.
“The same goes for the kitchen, monitoring everything there and really reducing our food waste,” he said.
All in all, it’s been a stressful time for Campbell, who says he’s never seen such severe inflation since working at the restaurant.
He is counting on regular customers to help the restaurant through this difficult period.
“We want our customers to come back here and still get the same item they’ve used to getting in the last 10 years of our business.”