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Food inflation has ‘gotten out of control’

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Wolfgang Puck says the luxury restaurant industry is feeling the pinch of inflation.

In a recent interview with Yahoo Finance, the world-renowned chef and restaurateur explained it bluntly, saying, “Some of this thing got out of hand.”

“The average cost of food in our restaurants has increased by 15%, which is a lot,” adding that some other costs, such as equipment to prepare food, are also on the rise.

“I bought cutting boards the other day, for example, for a restaurant I bought 12 cutting boards, I spent $1,500, then a week later it went up to $2,000. $,” Puck explained.

In general, Americans feel the pinch. The overall cost of food costs rose 11.2% from a year ago, according to the September consumer price index (CPI) from the Bureau of Labor Statistics (BLS), while the category of home food, groceries, increased by 13.0% per year. over one year, and out-of-home food increased by 8.5%.

(Courtesy of Wolfgang Puck Corporate Melrose)

(Courtesy of Wolfgang Puck Corporate Melrose)

For restaurateurs, however, the cost of food is just the tip of the iceberg. Wolfgang Puck says the cost of maintaining the dozens of restaurants, bars and lounges under the Wolfgang Puck Fine Dining Group umbrella is costing more now.

“Forget if there’s something to fix in a restaurant, just to have someone come and fix your stove or fridge, it costs a fortune, so it all came up,” Puck said.

Next, add the cost of staff salaries to the restaurants bottom line, with employees having the upper hand.

“It’s really a buyer’s market in a way,” Puck explained. “The employee said, I want so much money, and I’m going to work so many hours and so many days, so it became more difficult for us”, confident in the talent of his restaurants, adds – he, “but we have to navigate all of these issues and overcome them.”

In September, total employment in the leisure and hospitality sector was still below pre-pandemic levels of 1.1 million, or 6.7%, but employment in services restaurants and bars increased by 60,000 last month.

With restaurants all over the world, including New York, London, Singapore, Budapest, among others, he says the problem is not centralized in one city or country.

“It’s really tough, but it’s a worldwide phenomenon,” Puck said. “We have Spago in Budapest, for example… It’s as difficult in Budapest as it is in New York or LA to recruit people, and I think, thank God, we have a good reputation and we pay well, so we continue can attract people, but it has become more expensive.”

At a restaurant, Puck says a sommelier who had previously been on a salary of $100,000 plus commission confronted him with a competing offer of $130,000 a year, asking if it could be matched.

Wolfgang Puck replied, “you know what? I’ll match it because I like you and you’re good with customers.” Weighing the options he had at the time, Puck added “but also, for me to train someone new would cost me over $30,000.”

Despite inflation rising by 8.2% last month, the chef believes that “the luxury segment is still there”.

“People still have money to spend,” he said. “Maybe they go out less maybe, but not that much really. I know in Las Vegas, we have restaurants in Las Vegas, it’s booming, it’s better than ever and I’m sure the hotels, the game are doing better than ever, because we get the customers if they lose enough money,” he added jokingly, “they have to eat and drink.”

Brooke DiPalma is a reporter for Yahoo Finance. Follow her on Twitter at @BrookeDiPalma or email him at bdipalma@yahoofinance.com.

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