ATLANTA — It’s hard out there for restaurateurs.
In what is — they hope — the tail end of the worst slump in decades, restaurant chains big and small are wrestling with higher prices for key ingredients and crops. The costs of corn, wheat, pork, beef and chicken have risen and are expected to jump next year.
The big question: When or whether to pass along the costs.
Sure, charging more could help protect profits — but it could also startle customers already shocked by the economy.
Restaurants’ strategy will influence where Americans eat, and how much they spend.
Some operators say they plan to raise prices gradually with consumers’ consent. Others want to hold prices steady and see what their competitors do.
“We’re obviously in a very cost-sensitive industry,” said Robby Kukler, partner at Atlanta-based Fifth Group Restaurants. The company has seen prices rise for beef, chicken and, especially, butter. But Fifth Group has held prices down on most meals.
“We know people are sensitive to it,” Kukler said. “We just made a conscious effort . . . to hang steady.”
Global factors are roiling the food markets. A drought in Russia caused wheat prices to rise and more corn was used to make ethanol, pushing grain and corn prices up 40 percent and 60 percent, respectively.
Demand from China has raised the price of soybeans. Coffee and sugar are at 13- and 30-year highs, respectively. Beef is up 19 percent this year, according to Bloomberg. Higher feed costs are also expected to push up the price of chicken.
Executives at McDonald’s said menu prices could rise if the economy improves. The chain has said its commodity costs will increase by about 2 percent in the fourth quarter.
