“We don’t want to raise prices for our customers, but it’s really hard to stay open with the supply environment as it is.”
ST. LOUIS — St. Louis business owners are trying to keep costs down, as prices keep hiking up due to inflation.
George Zsidisan is a professor of supply chain and leads University of Missouri – St. Louis’ Supply Chain Risk and Resilience Research Institute.
He said right now, the conflict in Ukraine and the Shanghai COVID-19 lockdown are big reasons for this problem.
Plus, add that to the local shocks from COVID-19.
Zsidisan explained a labor force exit, an increase of minimum wage rates, and the increase of costs are all factors, too.
Unfortunately, he shared, this is something we may be seeing for some time and business owners need to brace for what’s to come.
Each pastry at Pint Size Bakery is handmade and co-owner Christy Augustin sprinkles on lots of care and attention.
She said a heftier price tag is also being added to the mix.
“We’re experiencing things like our butter has gone up over 50% in just the last few months. And butter is the basis of almost everything we make. We go through four cases a week!” Augustine exclaimed.
Augustin shared the small shop faces a big hit, due to inflation.
“We’re getting really big increases in paper goods and just specialty ingredients that are really difficult to find, and we have no choice to take those price increases. We’re getting charged for diesel fuel costs, too,” Augustin noted.
For months, they’ve eaten the costs. Unfortunately, that can’t happen anymore.
The pastry items will go up 25 to 50 cents. As for the cakes, that will be a bit more.
“Because they are all butter, that increase then translated into $5, $10, $15 more on each layered cake,” she noted. “We do everything we can so we can pay every dime we make to our employees.”
American Falafel in the Delmar Loop feels the same burden.
Owner Mohammed Qadadeh said the problem keeps boiling up and it’s impacting everything from chicken to bread.
“Everything has tripled and sometimes more,” Qadadeh shared. “Since the beginning of the pandemic we raised prices twice. We don’t want to raise prices for our customers, but it’s really hard to stay open with the supply environment as it is. We do want to pay our employees.”
Vincent Van Donut in St. Louis’ Grove neighborhood is also feeling the pinch.
“We absolutely are raising prices. We had to,” owner Vincent Marsden shared. “Filling our fryer in 2020 was $90 and now it’s $250. And that’s just the price of oil. Shortening was $35 and now it’s just under $70.”
He admitted, bumping up the cost of a donut by a quarter doesn’t even come close to covering it but they are stuck because they can’t out-price the customer.
“It’s everywhere in the food business and on top of gas for businesses that get deliveries, that charge has increased, too. It’s not good for any small or larger business,” Marsden added.
JV’s Downtown Bar and Grill in Waterloo faces the same beast. Owner Jeff Vogt said they will raise prices in July. He contributed the increase to several factors.
“Turkey just jumped 50 cents a pound, ground beef is up, and minimum wage increases,” he said.
As some owners make the adjustments, others are holding on as long as they can.
Aaron Tietelbaum owns Herbie’s and Kingside Diner in St. Louis city and county. He explained they aren’t budging yet.
“We are holding to our price and taking a cut on profit. We feel once you raise prices, they won’t go back down and we don’t want to move that way until we have to. It’s hard between labor and costs of goods though. Not saying we won’t, but not today,” Tietelbaum said.
As for Salt + Smoke, it has five locations and owner Tom Schmidt admitted he’s also trying to avoid it.
“We may have to make some adjustments. These inflation issues will catch up with everything if they go on long enough,” Schmidt shared.
As the issues continue, all the owners hope the support is as big.
“That’s how we stay open through the support to the community,” Qadadeh emphasized.
Schmidt noted people are hungry for the dining experiences. So much so, Schmidt told 5 On Your Side last week was their busiest week in the history of Salt + Smoke.