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Drought Leads Restaurants to Raise Prices, Cut Portions

October 15, 2012


Source: LA Times

Smokin' Jonny's BBQ opened less than a year ago, but pricey corn on the cob has already disappeared from the menu.

Rising beef prices are causing owner Jon Sekiguchi headaches as well. His Gardena restaurant sells beef ribs only on the weekends, when customers are more willing to splurge. And he's struggling to find affordable beef sausage for his $6.95 smoked sausage sandwich.

Scorching weather this summer in the Midwest left crops parched and livestock famished. Restaurants, already struggling with high fuel costs and a sluggish economy, are starting to feel the pinch of higher food costs.

"It's a tough one," Sekiguchi sighed. "I didn't want to sell corn for $3 when I used to charge $1.50. And it used to be better quality too."

Commodity prices were increasing even before the dry spell. Economists say even bigger hikes are ahead as the poor U.S. harvest ripples through the food chain.

Now fast-food giants, fancy eateries and even corner coffee shops are scrambling to adjust. The cost of food rivals labor as the top expense for most restaurants. Restaurateurs are revamping menus, reducing portion sizes and even considering staff cuts. In the months to come, they say, watch for smaller steaks, fewer tortillas per entree and maybe even menu-wide price increases.

Customers are already seeing a change. Gina Grad, a radio network content producer, said she's noticing smaller servings, steeper bills and thinner crowds at the trendy restaurants in her Los Feliz neighborhood, where organic and locally grown ingredients reign.

The "only good thing" to come out of it: "The number of people out to brunch on weekends is down," said Grad, 34. "You can finally get a table in less than an hour."

Actor Chase Edmondson, 22, of North Hollywood, said he's taken to ordering kids meals to combat menu shock.

"It's kind of ridiculous when you're getting a hamburger for $12," Edmondson said.

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To read more visit the LA Times.


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