'If we don't open, we don't make money.' Restaurants face supply chain challenges

Michael Perchick Image
Friday, June 10, 2022
Restaurants face supply chain challenges amid customers return
As business picks up with the return of customers choosing to eat out more, restaurant owners say the supply chain is the biggest challenge.

Fredy Alvarez and his staff are preparing for another busy weekend at Gringo A Go Go, a popular Mexican restaurant on the corner of East Edenton and North Person Street in downtown Raleigh.

"People feel more secure to go out next to other people. We're starting to get more events," said Alvarez, who serves as General Manager.

We met up with him Friday afternoon as the lunch rush wound down and crew prepared for the dinner crowd to arrive. While 2022 has brought back customers, thanks in part due to expanded outdoor seating options, they're still navigating supply chain challenges.

"We focus a lot on eco products for takeout. So for us, it's been insane how increase the price is, and also the way to find it is really even harder. So even if you increase the prices, you can't even find the products that you're looking for," said Alvarez, who added they're paying three times as much for the compostable products which diners have grown accustomed to.

That's on top of price increases to popular items.

"(Our costs), especially food, increased by 30%. And on our menu, we raised (prices) by 5, 6%," said Alvarez, who added diners have been understanding of any adjustments.

Alvarez is hopeful the temporary hit to the bottom-line is worth it to maintain customer loyalty long-term.

"They have to believe in places that do the best for the community around them. So they come try it, believe it, and see the difference between other places, and that's the one they support," Alvarez explained.

Over in Roxboro, Bryan Day, owner of Clarksville Station, is dealing with supply chain challenges of his own, though his are more severe.

"What really set us back was the equipment that we use to make a restaurant a restaurant. So it was a lot of supply chain issues that parts were not there, readily available for them to actually build these ovens, grills, and things like that for it to be shipped to us," Day explained.

The restaurant has been closed since mid-February for renovations that had an initial completion goal of six weeks.

"We were given a date for when it would be shipped, and then the manufacturer would come back and say oh we need five more weeks. And then five more weeks would come, and then we need four more weeks," said Day.

He bought the restaurant just five months before the pandemic began, and another prolonged closure, stemming from the pandemic, adding increasing pressure.

"If we don't open, we don't make money," Day said.

He is aiming to re-open next weekend, as long as everything can be installed and inspected in the next week.

"It had needed some (upgrades) for a long time," explained Day.

May's Consumer Price Index report found inflation rose by 1% in May, and is up 8.6% year-over-year, the highest annual jump since December 1981. Friday, President Biden visited the Port of Los Angeles, highlighting efforts to ease supply chain backlogs to more quickly deliver goods.

"Getting things in and out of those ports has been one of our goals, and it's been a goal that's been largely achieved. The throughput, the rate at which things are getting through the ports now, is pretty much back to where it was prior to the pandemic," said Jared Bernstein, who is on the Council of Economic Advisors for the White House.