Airport food prices go up
With a change in city rules, it now costs more for some foods and beverages at Phoenix Sky Harbor International Airport restaurants and bars.
From bottled water to sausage pizza to the price of coffee at Starbucks, it now costs more to buy some foods and beverages at Phoenix Sky Harbor International Airport restaurants and bars.
That’s in the wake of a decision by the Phoenix City Council to eliminate “street pricing” on food and beverages sold at the airport. Restaurant operators had been prohibited from charging more than a 10 percent premium over what the item would sell for on the street.
The move cleared the way for price increases that the companies that manage the restaurants said are needed to keep up with labor costs, which are higher at the airport.
Reasons behind higher prices
Several factors make it more costly to run an airport restaurant compared to the street location.
❚ There are higher costs associated with working in a secure environment. Employees have to pass more stringent background checks and they have to go through security to get to work.
❚ Employees at the airport are union members who receive health benefits. Employees at street locations
might not.
❚ Much of the food is prepared at an off-site commissary and then trucked to the airport.
❚ Airport restaurants need to be staffed from early in the morning until late at night. Employees may have to work overtime when flights are delayed.
“To offset rising labor and food costs, we have adjusted our pricing which involves lowering prices for some menu items and making modest increases to others while maintaining pricing on a variety of items . ... The adjustments represent less than a 3 percent increase.”
When were price increases OK’d?
In December, the Phoenix City Council voted to eliminate street pricing. SSP America and HMS Host, the two companies that operate the airport restaurants, submitted letters asking that the policy be changed because airport restaurants have higher labor costs than street restaurants.
In a Sept. 27 letter to the airport, SSP America asked for a change to street pricing plus 15 percent. HMS Host wrote a letter asking for other remedies, such as a 5 percent increase in retail costs and adding more kiosks.
A consultant hired by the airport found that even with no policy change, the two companies would make a profit. However, the council voted to end street pricing altogether and allow restaurants to charge more as of Feb. 15.
HMS Host and SSP America were required to submit menus with the new prices to the airport by Jan. 30.
In December, the made a public records request for all the menus filed with the airport. Those menus show the original pricing under the airport’s street plus 10 percent policy. We made a second request in February for all of the updated menus.
2 companies run airport eateries
Sky Harbor is proud of its lineup of local-favorite restaurants. Most of those are managed by HMS Host and SSP America.
HMS Host operates:
❚ Barrio Cafe
❚ Blanco Tacos y Tequila
❚ Chelsea’s Kitchen
❚ Cowboy Ciao
❚ Dilly Deli
❚ El Bravo
❚ Focaccia Fiorentina
❚ La Grande Orange
❚ La Madeleine
❚ Mustache Pretzels
❚ Olive & Ivy
❚ Panera Bread ❚ The Parlor
❚ The Rocket
❚ The Refuge Cafe
❚ SanTan Brewery
❚ Shake Shack
❚ Starbucks
❚ ZinBurger
SSP America operates:
❚ Cheuvront Restaurant
Bar
❚ Christopher’s
❚ Delux Burger
❚ Four Peaks Brewing Company
❚ Humble Pie
❚ Joe’s Real BBQ
❚ Lolo’s Chicken and Waffles
❚ Los Taquitos
❚ Matt’s Big Breakfast
❚ Nocawich
❚ Pei Wei
❚ Pita Jungle
❚ Smashburger
❚ Sweet Republic
❚ The Tavern
❚ Uberrito
❚ Wendy’s (in partnership with Airport Concession Disadvantage Business Enterprise Program)
❚ Wildflower Bread Company
❚ Yogurtology
❚ Zinc Brasserie and Wine
What SSP America restaurants did
While reviewing the menu items at SSP restaurants, we found a few higher prices.
❚ Delux Burger, Panda Express, Smashburger and Joe’s BBQ showed no price changes.
❚ At Matt’s Big Breakfast, the only increase was in the price of two eggs a la carte, which cost 40 cents more.
❚ At Cheuvront Restaurant and Wine Bar, food items stayed the same but the price of wine went up 25 cents per glass.
❚ Zinc Brasserie’s beignets went up 50 cents but the rest of the food prices stayed the same. The price of wine went up 25 cents a glass.
❚ Four Peaks Brewing, Humble Pie, Los Taquitos, Nocawich and Wildflower all had menu items that went up 50 cents or more.
❚ The biggest increase we saw was at Humble Pie. The margherita pizza and the sausage pizza went up by more than $1 each and some breakfast wraps went up as much as $2.50.
❚ Some Wendy’s items cost more. The three-piece chicken tenders had the highest increase, 70 cents. Salads increased by 20 to 40 cents. The price of kids menu items did not change.(Note: SSP says it does not directly manage Wendy’s in Terminal 4. It is a partnership through its Airport Concession Disadvantage Business Enterprise Program.)
We reached out to SSP America to understand how it made its pricing decisions.
In an emailed statement, SSP Director of Operations Thomas Romig said, “To offset rising labor and food costs, we have adjusted our pricing which involves lowering prices for some menu items and making modest increases to others while maintaining pricing on a variety of items such as kid’s menus.
“In total and across the units we operate, the adjustments represent less than a 3 percent increase,” Romig wrote.
SSP America has started offering a 20 percent discount to people who work at the airport, including airline, aviation and security personnel.
What HMS Host restaurants did
When we analyzed menus at HMS Host restaurants, we saw broader increases.
❚ Most beverages at Starbucks now costs 10 to 15 cents more. A tall brewed coffee is 5 cents more.
❚ Most brands of bottled water cost about 10 cents more at HMS’sgrab-andgo restaurants. Pellegrino costs 30 cents more. The only brand that remained unchanged was the 700 ml Smart Water.
❚ Barrio Cafe, Blanco Tacos y Tequila, Chelsea’s Kitchen, Cowboy Ciao and Olive & Ivy all had menu items that increased by more than $1.
❚ El Bravo, Refuge Coffee and McDonald’s did not raise prices.
We made repeated attempts over several weeks to contact HMS to ask questions about the observed change in prices. The company did not return our emails or phone calls seeking information nor did it respond to our request for comment on the increase in prices.
We found many items that cost the same at the airport and at the street restaurants. Other items cost as much as 20 percent more at the airport. Most of the prices we were able to compare appeared to fall between 5 and 18 percent more expensive at the airport.
SSP’s Los Taquitos had the largest number of items priced more than 20 percent above the online menu for the street location. However, all but one of its menu items cost less than $10 at the airport.
In some cases we found it difficult to do an exact comparison of the airport menus to the street-location menus. On many dishes, ingredients are slightly different at the airport to accommodate the challenge of preparing food in small areas past security.
What is street pricing?
In the 1990s, many airports implemented street-pricing policies to ensure that a captive audience of customers didn’t overpay.
But because of the additional costs of running airport restaurants, some airports started adding flexibility to street pricing. In 2015, Sky Harbor Airport implemented a “street pricing plus” policy that allowed companies to charge street prices plus 10 percent.
After receiving SSP America and HMS Host’s request for further adjustment, the airport researched what comparable airports required. In a spreadsheet provided to the under open records laws, Sky Harbor staff found:
❚ Airports in Toronto, Orlando, Newark and Boston require street pricing.
❚ Seattle’s airport requires street plus 5 percent. It will drop that to street plus 2.5 percent in 2020.
❚ Atlanta, Chicago O’Hare, Dallas Fort Worth, Denver, San Francisco, Miami, Charlotte, Dulles, Minneapolis, Fort Lauderdale and Detroit allow street plus 10 percent.
❚ Los Angeles rang in the highest at street plus 18 percent.
❚ Las Vegas was the only airport with no policy regarding pricing.