The rising costs of dining out…

Gorgeous flowers are everywhere on the island of Madeira, Portugal
In recent years, dining out in the United States has become increasingly expensive, and the trend shows no signs of slowing down. Various factors have driven rising restaurant prices, including supply chain disruptions, increased labor costs, inflation, and changing consumer behaviors. Today’s post explores the multifaceted reasons behind the escalating costs of dining out and the broader implications for consumers and the restaurant industry.

Last night, this mainly came to mind when five of us dined out at a casual Thai restaurant, ordering a few dishes each, such as soup and rice, salad and edamame, fried rice, and a stir-fried dish, the dishes commensurate with choices most diners would make at any Asian-type restaurant.

Only three alcoholic drinks were ordered: two glasses of wine, one beer, and one glass of root beer. This was not an outlandish amount of beverages when everyone else drank plain water. When the bill came, it was $249. We were shocked. What’s going on in this crazy time of inflation that contributed to the size of a bill for only five people in a casual restaurant when no one ordered anything excessive or out of the ordinary?

One of the primary drivers of rising restaurant prices is the ongoing disruption of global supply chains. The COVID-19 pandemic exposed the fragility of supply networks, leading to shortages of key ingredients and supplies. For instance, meat prices surged due to processing plant closures and reduced livestock production. The ripple effect of these shortages has been felt across the restaurant industry, forcing eateries to pay more for essential ingredients. Additionally, the cost of imported goods has increased due to shipping delays and higher freight costs, further compounding the issue.

Labor costs have also risen significantly, contributing to higher menu prices. The labor market has tightened, and many restaurants struggle to find and retain staff. This has increased wages and improved benefits as businesses compete for workers. The federal minimum wage has remained stagnant, but many states and cities have implemented their increases. For example, California’s minimum wage is set to reach $15 per hour in 2022. Higher prices often pass this rise in labor costs to consumers.

Inflation is another key factor driving up restaurant prices. The Consumer Price Index (CPI) has consistently increased, reflecting higher costs for goods and services. As of mid-2023, the CPI indicated a year-over-year inflation rate of approximately 5%, with food prices rising even more sharply. Restaurants that operate on thin margins have little choice but to adjust their prices to keep up with the inflationary pressures on their operating costs. Ingredients, utilities, rent, and other overheads have all become more expensive, necessitating price hikes on menus.

The pandemic has also changed consumer behaviors in ways that impact restaurant pricing. There has been a significant shift towards takeout and delivery, which come with their costs. Packaging, third-party delivery fees, and the need for digital ordering systems add to the expenses that restaurants must manage. Moreover, consumers are willing to pay more for convenience and safety, allowing restaurants to charge premium prices for these services. Additionally, the demand for locally sourced and organic ingredients has risen, and these items typically come at a higher cost.

Rising restaurant prices are straining consumers’ wallets. For many, dining out is becoming a luxury rather than a routine activity. Budget-conscious diners are increasingly opting for home-cooked meals or cheaper fast-food alternatives. This shift could have long-term effects on the restaurant industry, as establishments that cannot adapt to the new economic realities may struggle to survive. Consumers are also becoming more discerning, seeking value for money and prioritizing quality over quantity.

For restaurants, the challenge is to balance the need to cover rising costs with the risk of alienating customers through higher prices. Many establishments are adopting strategies to manage these pressures. Some are simplifying their menus to reduce waste and streamline operations. Others are investing in technology to improve efficiency and reduce labor costs. Dynamic pricing, where menu prices fluctuate based on demand, is also becoming more common. However, these measures may not offset the overall upward trend in costs.

The future of restaurant pricing in the U.S. remains uncertain. While some of the current pressures may ease as supply chains stabilize and inflation moderates, other challenges are likely to persist. The push for higher wages and better working conditions in the industry is expected to continue, maintaining upward pressure on labor costs. Additionally, consumer preferences for convenience, quality, and sustainability will likely keep prices elevated. Restaurants will need to remain agile and innovative to navigate this complex landscape.

The rising prices at restaurants in the U.S. result from a complex interplay of factors, from supply chain issues and labor costs to inflation and changing consumer behaviors. This trend has significant implications for both consumers and the restaurant industry. While dining out may become less frequent for some, others will continue seeking high-quality and convenient dining experiences, even at a premium. Restaurants adapting to these changing dynamics will be better positioned to thrive in this challenging environment. Balancing cost management with customer satisfaction will be crucial for the industry’s long-term success.

Of course, under our circumstances of dining out a few times each week, drawing us to those places where we can eat for less than $30 per person, including beverages, is preferred. Those are few and far between in Minnesota and many other cities throughout the US, and ultimately the world, as we’ve experienced over the past several months.

Be well.

Photo from ten years ago today, July 9, 2014:

Photo of beach at our upcoming second Fiji house. For more photos, please click here.

One week and counting…

Male tree frogs fertilize a foam nest that a female frog made overnight. Nature is amazing! The photo was taken in December 2013.

A week from today, we’ll be on the road to Guayaquil Airport, 3 hours and 22 minutes from our location. We’ll likely head out the door around 8:30 am for our 2:53 pm flight to Panama City, with a 1-hour 33-minute layover, and then on to Las Vegas. Our flight arrives at 10:40 pm, and after going through immigration, getting our bags, and picking up the rental car, we most likely won’t arrive at the condo until around 1:00 am or later.

Of course, we won’t unpack that night, only taking out toiletries and clothes for the following day. I hope we get at least six hours of sleep since we’ll wake up to a busy day. First on the agenda is the trip to Costco to purchase my much-needed computer and pick up a few groceries, enough to last a few days.

Once we’re settled, most likely, we will do an online grocery order from Smith’s, where we’ve shopped in the past and been pleased with their products and service. Initially, I’d planned to buy a lot of food at Costco, but I have found some of their prices on groceries are not necessarily better than prices at a grocery store. Plus, Smith’s will have a better selection of miscellaneous items we use. Large sizes of many products don’t work if they end up spoiling.

Then again, how much we buy at cost depends on how we feel if we don’t sleep enough. Costco is not fun when one is exhausted. It may be challenging to recall prices on items that may or may not be a good deal, especially since we haven’t grocery shopped in the US since we were in Florida last summer.

With inflation, prices have crept up over the past several months. We are in for a rude awakening of increased costs since we left Florida at the end of July. And most likely, prices will be as high in Las Vegas as at The Villages.

If my medication arrives, we’ll head to our mailing service the next day to pick it up. This morning, when I checked the tracking number, apparently, the package had arrived in the US from Singapore, where many prescription drugs are manufactured. Often, Americans assume their medications are manufactured in the US, and many are not.

Here is an interesting article about where prescription drugs are manufactured worldwide. It’s a fascinating article that may surprise you. As for the world’s manufacturing countries, here is the list and percentages:

The USP Medicine Supply Map analysis (Chart I) counts the number of active API DMFs by location.

  • India accounts for 48%
  • China accounts for 13%
  • U.S. accounts for 10%

We are deluding ourselves by assuming that most drugs are manufactured in the US. Surprisingly, buying them from a US pharmacy costs so much. The cost for the blood thinner I must take, Eliquis, buying from Singapore through ProgressiveRX is $95.49 for 56 pills (almost enough for one month), compared to buying it at a pharmacy (without a pharmacy plan) is $599.97. Who can afford this?

I realize I’d mentioned this in a past post, maybe more than once, but if one of our readers sees this after missing that post and is paying these high prices, it would have been worth posting it one more time.

We’re bracing ourselves for higher prices on most things in the US. But, while we’re in the US, we look forward to a broader selection than most other countries.

One reader wrote and asked how long we’ll be in the US. If all goes well, we’ll likely return to Marloth Park in June as planned. However, we won’t stay more than 90 days this time. According to many reliable sources, South Africa’s immigration department still cannot process extensions due to a lack of staff. We won’t be applying for an extension again.

We’ll be back with more tomorrow. Be well.

Photo from years ago today, December 7, 2013:

While walking in our neighborhood, Tom spotted this ostrich that had wandered into a homeowner’s driveway and appeared fascinated by looking at himself in the window. For more photos, please click here.