From labor to food costs, restaurant industry dealing with higher prices

PALM DESERT, CA – Several eateries are struggling with the increased cost to operate. Kai Beech has the story.

Kai visited a popular restaurant in Palm Desert where owners say some of the products they’re buying cost twice as much as they did just one year ago. Now they’re are working their hardest to make sure they don’t pass that cost on to their customers.

At Babaloo Lounge in Palm Desert, the kitchen crew is prepping. Preparing food products, they say cost a lot more nowadays. Owner Gus Ungo says food costs are rising, they have been, and it’s impacting his bottom line.

“Ah man, it’s crazy, it’s crazy out there. Prices have almost doubled and just trying to keep up with the market. Try not to pass to the consumers but it’s getting to a point where my hands are getting tied,” says Gus.

We’re learning what’s happening with higher food costs at this Coachella Valley restaurant is happening across California and the country. Joe O’Donnell is a longtime restauranter, and board member of the California Restaurant Associations. National numbers show, food prices are almost 26 percent higher than pre-pandemic. And they might stay that way, or get higher.

“For the first time in my almost 40 years in the industry I have witnessed almost every… under attack,” says Joe. “It’s very difficult to navigate the unknown.”

This unknown could impact how often customers dine out. At Babaloo Lounge, Gus takes pride in his menu and his prices. But with food costs near an all time high, he’s trying to find balance, without the kitchen crew decreasing portions size or increasing prices.

“The owners here tell me, though they don’t want to, but if food prices continue to rise, they may have to change their menus and prices,” Kai reports.

This story was written and reported by Kai Beech.