VIRUS TAKES BITE OUT OF OFFERINGS, PROFITS

South Florida restaurants raise prices, cut menu items amid shortages

Jane Ruffolo’s server delivered the warning as she slipped into a patio seat at Baja Café in Deerfield Beach. Her usual order – the $12.99 taco shell salad with ground beef, no cheese, no guacamole, no sour cream – had jumped a dollar in price because of COVID-19-related meat shortages.

Ruffolo ordered it anyway, hardly shocked by the news. She’d heard about meatpacking plant closures, then national meat shortages. But after seeing sticker shock at her supermarket — “everything I buy like milk, eggs, boneless chicken for my dog” — Ruffolo figured restaurants would be next.

“That price isn’t stopping me,” the retired Deerfield Beach schoolteacher says between crunches of iceberg lettuce. “Besides,” she adds, drumming her fingers against a blue divider wall installed on Baja Café’s patio last week, “I care more that I’m safe.”

Hoping to rebound from a two-month lockdown, South Florida restaurants — at half-capacity and barely surviving on sluggish takeout sales — are now grappling with food costs creeping higher.

Now restaurants are wrestling with the choice to pass these increases to patrons,

stop serving certain dishes altogether, or do nothing.

Experts say these price surge sat restaurants should be temporary, dovetailing with recent spikes in supermarket prices. After national lockdowns drastically cut demand for food in the hospitality industry, dairy farmers dumped milk, produce farms left vegetables to rot on the vine and meat plants closed as workers tested positive for COVID-19. Shortages cascaded down the country’s food-supply chain to South Florida’s wholesalers and supermarkets.

Prices of typical food items — meat, dairy, baked goods, coffee — increased 7.9% at grocery stores in Broward, Palm Beach and Miami-Dade counties between February and April.

For Baja Café owner Priscilla Roseman, her food suppliers jacked up meat costs by 20 to 35%. Roseman responded by hiking menu prices by $1 on dishes that use beef, pork and chicken, about 90% of her menu.

“It should really go up like $3 to $5, but I didn’t want to scare consumers into thinking, ‘ Oh, these prices are out of control,’” Roseman says. “We just reopened. The timing of this couldn’t be worse.”

But it’s not unexpected, says Michael Cheng, a hospitality expert and dean of FIU’s Chaplin School of Hospitality and Tourism Management.

“It’s a supply-and-demand problem,” Cheng says. “All that food spoiled because we shut down everything for two months. It created a ripple effect that hurt suppliers and farms. Now we’re seeing the same price increases at grocery stores as we do restaurants, and it’s going to take time for prices to work their way through the supply chain and level off.

Vagner DeCarli, chefowner of brunch restaurant Bulegreen Café in Oakland Park, is wary of charging her customers more as restaurants try luring already-nervous patrons back to dining rooms.

Her supplier doubled the cost for a box of 30 eggs — $8 instead of $4 — and increased prices on pork, turkey and milk.

“We’re paying more for food but our prices are still the same,” says DeCarli, who noticed prices creeping up first at the grocery store. “We’d rather lose profit margins than do that to our customers. Everyone is scared and has less money to dine out, and to boot many people are unemployed.”

Customers are “generally understanding” about prices rising on menus, Cheng adds — but not always. Chicago-area restaurants recently tested socalled “COVID -19 surcharges” — small fees tacked onto the final bill – to make up for lost revenue, pay overhead and defray soaring food costs. That triggered a small backlash from patrons on social media.

“People get what’s happening in the industry,” Cheng says. “People remember panic-buying and are willing to pay higher grocery prices just to get access to items they want. In their head, it makes sense to the consumer.”

But some South Florida restaurants won’t gamble on losing potential revenue. Chef and co-owner Rob Menendez relies on lunchtime foot traffic at It’s a Cuban oB, a Cuban café tucked inside a nondescript office park in Pompano Beach.

Under lockdown, overall sales plummeted 80% as office workers quarantined at home. He doesn’t qualify for Paycheck Protection Program loans because his two employees — his father and sister — are part-owners.

Meanwhile, Menendez’s wholesale and meat suppliers hiked costs for meat. So he overhauled his menu, replacing his Abuelita rice bowl special with a build-your-own bowl concept. He also nixed the café’s six- and 10-piece chicken wings from the menu rather than hike prices.

“Our regulars are just coming back and we need an incentive to keep them,” Menendez says. “I don’t want them coming that fourth or fifth time and decide, ‘I’m paying too much money, I’ll come fewer times.’ I’d rather eat the cost from my supplier.”

Still, suppliers and restaurants are uncertain when food costs will stabilize top re-pandemic prices. Assuming South Florida dodges another spike in coronavirus cases, the middle of June sounds likely, says William B. Stronge, a professor emeritus of economics at Florida Atlantic University.

But June also may be “wishful thinking ,” Stronge adds.

“It’ll take weeks for the supply chain to crank back up,” Stronge says. “But who knows if there’ll be a second wave? People were more conservative with spending [after the 2008 Great Recession] and it took a long while to get over the shock.”

During lock down, coowner Jack Stud ia le turned his 71-year- old Tropical Acres Steakhouse in Dania Beach into a butcher shop, instantly popular among takeout crowds hunting for restaurant-caliber cuts at wholesale prices. By mid-May, eight- ounce filets had jumped from $12 to $13. Ten- ounce New York strips went from $9 to $11. Seven other steak cuts went up a dollar.

Customers started noticing. “Some folks are like, ‘Hey, two weeks ago this was $12, now it’s $13,’” Studiale says. “I’m like, ‘I’m sorry. But I can’t absorb a 25% increase. My filets went up $3 a pound from the supplier and I only raised prices a dollar. We’re sensitive to this.”

To save money, Studiale’s meat buyer told him to hold off buying fresh meat “until the second week of June.”

“It’s bother some” because it’s forcing me to raise prices,” he says. “We just have to wait until costs level out.”

JOHN MCCALL/SOUTH FLORIDA SUN SENTINEL Kimberly Bradshaw and James Inman enjoy a meal at Baja Cafe in Deerfield Beach on Thursday. The restaurant's owner, Priscilla Roseman, has had to raise her menu prices by $1 because of a meat shortage from wholesale suppliers.