Texas Restaurant Association Statement on Rising Costs and the Economic Outlook for Our Industry
June 21, 2022 (Austin) After struggling through over two years of the COVID-19 pandemic, Texas restaurants are bracing for what may become our toughest operating environment yet thanks to the double-whammy of extreme cost increases and weakening consumer buying power.
The war in Ukraine, droughts around the world, and rising shipping and energy costs have already driven wholesale food prices up nearly 18%, the largest 12-month increase in nearly 50 years. Unfortunately, consumers are facing these same cost pressures with nearly everything they purchase, including at the gas pump and grocery store where prices are also increasing by double digits. This leaves consumers with less disposable income to spend at restaurants at the same time that they’re hearing warnings to save and prepare for an economic recession.
The good news is that restaurants have learned to adapt and will continue to get creative to serve their customers. This creativity is illustrated by the streamlining of menus, using every part of an ingredient, reducing hours, and expanding the use of technology—all in an effort to do more with less. These strategies are paying off, allowing restaurants to raise their prices about 7% compared to grocery stores which have raised prices around 12%.
While there’s no doubt restaurants are feeling the same economic pressures that our customers are, we continue to be humbled by all of the restaurants that are staying nimble and prioritizing their guest experience. The Texas Restaurant Association will continue to support restaurants of all shapes in sizes as we navigate the latest challenges in our road to recovery.