Inglewood, California, is facing challenges as restaurant owners struggle under the weight of tariffs and inflation. Sunday Gravy, an Italian restaurant with a long family history, exemplifies this difficulty. Owner Sol Bashirian revealed that the eatery is currently “barely breaking even” due to rising costs. He noted a significant increase in monthly expenses for imported ingredients, which has impacted the restaurant’s profitability.
Effects of Tariffs and Inflation on the Restaurant Industry
Despite a 30% sales increase over the past year, Sunday Gravy’s legacy is at risk. Bashirian recalled how his father invested his life savings into the restaurant nearly 50 years ago, highlighting the emotional and financial burden now facing the family business.
Financial Analysts Weigh In
- R.J. Hottovy, a financial analyst from Placer.ai, emphasized that eateries serving lower- and middle-income consumers are particularly affected by financial pressures.
- These pressures include rising costs of food, rent, and overall inflation.
- A recent report from Toast revealed that 48% of surveyed restaurants are contemplating menu price hikes if costs continue to surge.
To merely sustain a profit margin of 5%, menu prices would have to increase by approximately 30.3%, according to the National Restaurant Association. Bashirian expressed that while raising prices may appear straightforward, it involves complex processes, including reprinting menus.
Consumer Reaction and Business Strategies
Heightened prices could deter customers, a risk Bashirian is keenly aware of. He noted that pasta dishes, traditionally seen as affordable, shouldn’t require exorbitant pricing. In response to rising tariffs, Sunday Gravy has implemented a 5% surcharge on customer bills, permitted under California law if clearly displayed on the menu. Bashirian articulated the urgency for relief from tariffs, emphasizing its potential to help the restaurant continue thriving.
Industry Advocacy
The National Restaurant Association is lobbying for exemptions on tariffs for imported food and beverages, arguing that such relief is crucial to prevent industry losses potentially amounting to billions. As costs rise and consumer patience wanes, the restaurant industry faces a pivotal moment in its history. Tariffs and inflation continue to mold the future for restaurants like Sunday Gravy, threatening not only their legacy but also their viability in a competitive market.
