Inflation continues to impact Illinois restaurants

(The Center Square) – Illinois restaurants continue to tread lightly as adversity hits them from multiple directions.

The combination of inflation, rising costs, staffing shortages and current and potential employees demanding higher pay can be a recipe for disaster, Illinois Chamber of Commerce President Todd Maisch said.

“It’s not a fun time to be an owner of a restaurant right now, especially at the higher end of the dining spectrum,” Maisch said.

Prices have gone up for food and everyday items that a restaurant needs to operate, he said.

According to the chamber leader, high-end dishes like lobster pasta as opposed to chicken pasta, for example, may be getting “curtailed.” Not only is the lobster pasta likely not getting ordered as often as the chicken counterpart, but the margin is higher for that item. Restaurant owners are likely to pass on carrying the cost of a high-priced menu item when the demand won’t be there to sustain it.

“It’s not just the underlying price of food, it’s everything that goes into putting a plate in front of a customer or, you know, handing somebody a take-out order,” Maisch said. “All those costs have gone up, so it’s undoubtedly increased the cost of eating out.”

Maisch said most restaurant owners value their long-term relationship with their suppliers as opposed to finding new suppliers to save money on restaurant items in the inflation interim.

“Even in a relatively extended period of inflation, I think most business owners are going to say there’s value in that relationship and goes beyond, you know, saving one, two or three percent on some of the inputs to the restaurant,” Maisch said.

Many people who often enjoy the fine-dining experience may be opting-in for casual dining instead. Servers for high-end restaurants are typically harder to train because they are required to perform more steps of service while serving a table from start to finish. There isn’t an oversupply of servers to begin with and many seeking employment at a high-end restaurant may be demanding more money, Maisch said.

“I think that especially the higher-end restaurants are in a trick bag in that those servers are hard to train, they’ve got to know their stuff more than your typical server at [a chain or franchise restaurant],” Maisch said.

According to the U.S. Department of Labor, the Illinois server minimum wage is $7.20 per hour in 2022. Servers at fine-dining restaurants are likely getting paid the same hourly rate as servers in casual-dining restaurants but have an opportunity to make more money as their overall sales from a shift are likely higher. A higher bill typically results in customers leaving a higher tip, as 20% is the standard tip etiquette in the U.S. for receiving above-average service at a sit-down restaurant.