The business of food: taking a bite out of inflation

Skyrocketing food prices over the past few years have taken their toll on the restaurant industry.

At the same time, minimum wage increased in January from $15 to $16 an hour, a reality that has only compounded the challenges to restaurants’ bottom lines.

LIBN spoke to restaurateurs and chefs to find out how they’re juggling higher overhead costs while keeping customers sated, satisfied and returning.

 

Technology utilization

When minimum wage goes up, it has a ripple effect.

“It ends up impacting more than just the minimum wage people. It goes all the way up the staff,” said Lawrence Lessing, chief operating officer of Lessing’s Hospitality Group, which runs nine restaurants on Long Island, including Mirabelle Restaurant & Tavern in Stony Brook and the Library Caf in Farmingdale.

You can’t raise prices too high because you have to keep some kind of value proposition for the guests, Lessing said.

“Maybe we lose a little profit today, but we keep more guests in the long term by keeping the prices more conservative, and it comes back around long term,” Lessing said.

The hospitality group has used technology to optimize their business, gleaning when exactly guests are coming down, to the patterns of every day and hour and, Lessing said, “being really strategic and intentional about how we staff.”

The restaurant group has been adding handheldspoint-of-sale devices servers use tableside for orders and checkswhich expedite service and turns tables over faster. These are now used at Bayberry, Hatch, Mirabelle and The View, and will be rolled out to the rest of their restaurants by the end of the year.

“The next phase is continuing to research ways to become more efficient, whether it’s new equipment that does things faster; things like that,” Lessing said.

 

Attract diners, not drinkers

As prices went up during the first year of the COVID-19 pandemic, the Bohlsen Restaurant Group absorbed the extra costs.

“But at a certain point, it’s a business, and you can only afford to do so much before you can’t go on anymore, so we started raising our prices,” said Kurt Bohlsen who, with his brother, Michael, owns and operates Tellers: An American Chophouse in Islip, H2O Seafood & Sushi in Smithtown, and Prime: An American Kitchen & Bar in Huntington.

The pandemic forced them to look at every aspect of the business: from software and technology, to cleaning products.

“It did give us the opportunity to see things in a different light,” Bohlsen said.

For example, they learned that diners were more profitable than bar patrons, so they removed cocktail tables along Prime’s boardwalk, replacing them with dining tables. This also necessitated expanding the kitchen to accommodate more food servce.

“A lot of bar patrons, they spend less, and they come one patron per car,” said Bohlsen, noting there’s a limited amount of parking. “Diners typically come two or more per vehicle, and they’re going to spend more money.”

The restaurants also started charging for bread something they were loath to do.

“You don’t want to be the first guy to charge for bread because there was an uproar: ‘How can you charge for bread?’ But now everybody’s charging for bread,” Bohlsen said.

 



A bang for your buck

To cut costs, many restaurants are cutting back on hours, especially during slow times, notes Tim McCarthy an owner of Daisy’s Nashville Lounge in Patchogue.

“Some people who were open for an early lunch are now opening at 3, 4’o’clock,” McCarthy said. “Unless you fill the place up for lunch, you lose money with the payroll.”

From wages to insurance, prices have gone up throughout the restaurant industry.

“We’re trying to manage it so we don’t have to charge an extreme amount of money for a cheeseburger,” McCarthy said.

To keep attracting people, McCarthy said, you have to run specials and constantly get the word out through social media and advertising.

Daisy’s has live country music five nights a week and either a DJ, karaoke or country music trivia on the other two nights.

“We give them a lot at Daisy’s. We try to do a lot of high energy stuff,” McCarthy said.

 

Doing the least with the best

When food costs soar, you have to accept that you won’t make as much of a profit, said Tom Gloster, executive chef of The Union in East Meadow, which opened in September 2023.

To save on labor costs, The Union’s food preparation methodology has changed to a much simpler approach.

“What we do is buy the best absolute ingredient we possibly can buy and do as little to it as possible,” Gloster said. “So instead of having to buy a marginally cheaper ingredient and then having to add sauce and do different things to make it taste better, we don’t do that. We let the food speak for itself.”

Gloster has also re-engineered the menu so that he can do more with less.

“You make the plates simpler pickups,” said Gloster, noting that this cuts both time and labor.

People seem to prefer this simpler approach to foodespecially if the quality is top-notch.

“You can just put a squeeze of lemon on a nice grilled fish, and you have something that’s delicious,” Gloster said.

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