Jonathan Horowitz - Convive Hospitality Consulting Joins Houston's Morning News

Episode Transcript

Speaker 1 (00:00):
Yeah, but thirty two dollars pasta five fifty three is
our time here in Houston's Morning News. Join us to
talk about restaurant prices these days. Jonathan Horowitz, Convibe Hospitality Consulting,
The Houston Chronicle round a story like they just woke
up to the fact that we've had some restaurant inflation
going on. Welcome to the party, kron It's been going
on for a while, hasn't it.

Speaker 2 (00:22):
Yeah, we've seen a lot of this, Jimmy, since COVID. Really,
I mean, there's a lot of things conspiring against restaurants
in terms of costs of doing business, and one of
the only things that restaurants can do about it, unfortunately,
is to raise menu prices to try to generate more
revenue to cover those additional costs. We've seen labor go

(00:45):
up and costs of food go up, and generally inflation
kind of hurting businesses across the board.

Speaker 1 (00:52):
Well, certainly the price of meat has gone way out.
That's been a real killer if your steakhouse. It's been
really tough to keep competitive pricing going on. But here's
what I have to wonder. After COVID nineteen, Johnathan, we
had all this pent up demand. We couldn't stand that
we got locked up for so long. We couldn't wait
to get back out and go to our favorite restaurants
and start living life again. So we were out there

(01:13):
and it didn't matter what the price was, we were
going to spend it. But I get the impression now
that's starting to matter what the price is, that people
are cutting back because the prices have gotten so high.

Speaker 2 (01:24):
Yeah, that's shifted a little bit in the past year
or so, and I think people are a little bit
more wary. Not everybody is out there spending as much
as they were right after we got back into society,
and with people being a little bit more cautious and
costs going up so much, restaurants are being put in

(01:45):
a very difficult position and trying to maintain some level
of profit margin, and it's getting harder and harder as
time goes on. We've seen people started to pull back,
and we just had some reports in the past few
weeks of the country not drinking as much. That's another
big factor, and that alcohol sales have gone down dramatically,

(02:07):
and that's typically where restaurants make their biggest margins. So
you've got a lot of things coming together to make
it more and more economically difficult to own and operate restaurants.

Speaker 1 (02:17):
Right now, I saw a story and I want to
get your thoughts on this. The story, I think it
was on Fox Business. They had reported that and they
were using McDonald's, which obviously is a fast food chain,
as an example. But since COVID inflation for the foods
that they serve, and the actual inflation rate has been
thirty percent, but the prices had gone up two hundred percent.
So I guess the question is, I know they're trying

(02:39):
to cover perhaps some other costs, but are there some
at least restaurants that are going above and beyond the
price of inflation and maybe have over calculated how much
Americans are willing to pay for their product.

Speaker 2 (02:53):
There may be some of that, but honestly, at this point,
a lot of it is just survival from the sense
for restaurants, because there are so many different inputs that
have increased. It's not just the cost of food, it's
the cost of labor, it's the cost of rent, it's
the cost of supplies. All of those things are coming together,

(03:15):
and on top of that, we've seen customers and you know,
the customers that used to be coming to the restaurants
are changing their habits. Things have changed in the past
five years in terms of expectations, So all of those
things are combining. It's it's kind of a perfect storm

(03:35):
right now, unfortunately. And you know, other than trying to
generate more business and get more people to walk through
the door, which is tougher and tougher now, restaurants have
to raise menu prices just to cover those costs.

Speaker 1 (03:47):
So do you suspect that there will be fewer people
going to restaurants, will be more restaurant closures here in
the Greater Houston areas the result of all this.

Speaker 2 (03:54):
Yeah, we've seen a lot of that recently. We've seen
some big name closures, you know, things that get a
lot of press. But you're also you know, having a
lot of the mom and pops that just can't hang
on anymore. On one hand, we're seeing some closures. On
the other hand, we're seeing some openings. So you know,
hopefully it will balance itself out. But it is tougher

(04:16):
right now to run a restaurant than it has been
in a long time.

Speaker 1 (04:19):
All right, Jonathan, thank you appreciate it. Jonathan Horowitz Convive
Hospitality Consulting, it's five fifty seven