Denby Fawcett: Diners Face Sticker Shock These Days. Don't Blame The Restaurant Owners - Honolulu Civil Beat


About the Author

Denby Fawcett

Denby Fawcett is a longtime Hawaii television and newspaper journalist, who grew up in Honolulu. Her book, Secrets of Diamond Head: A History and Trail Guide is available on Amazon. Opinions are the author's own and do not necessarily reflect Civil Beat's views.

Walking through Kaimuki, I was surprised to see a menu posted outside a neighborhood restaurant called The Surfing Pig with prices as high as $65 for marinated rib eye steak and $48 for pork shank.

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Reading the Sunday paper, Zippy’s was advertising a ZipPac Deluxe with teriyaki beef, Spam, chicken, chili and macaroni salad for about $17. And depending on where you go, sandwiches and hamburgers can cost $15 to $17.

“The day of the $20 plate lunch is not far away,” laughs restaurant marketing consultant Doug Harris. Of course, that’s hyperbole, but it’s the feeling customers get when they go out to eat these days. Menu prices are going through the roof.

There is a reason. Restaurant owners have been hit hard, slammed against the wall, first by the pandemic’s two lockdowns, and the absence of tourists and wary local residents staying home. Many food establishments in the first quarter of this year finally raised their prices to catch up for their losses over the last two years.

But now when customers are starting to come back in force, they are experiencing sticker shock as restaurants have had to raise prices again and again to meet their increased new costs from supply chain issues, employee shortages, gas price hikes, economic impacts from the war in Ukraine. The inflation rate was 8.5% in July.

“A perfect storm is an understatement. It’s more like a hurricane, a tsunami, and monsoon and a tornado, coming together all at once,” says Stan Glander. He is president and CEO of Kono Family Restaurants, which owns four Kono’s restaurants and The Surfing Pig on Oahu and two restaurants in Las Vegas.

Staffing shortages have forced restaurants already struggling to pay more to recruit new employees as well as to veteran workers to retain them. And on Oct. 1, restaurants will have to pay a 20% increase in the minimum wage, from $10 to $12 an hour.

Waiter serving customers at te Surfing Pig restaurant in Kaimuki. Civilbeat Photos Ronen Zilberman. August 15, 2022.
Customers have returned in force to restaurants after more than two years of Covid-19 restrictions and shut downs. Ronen Zilberman/Civil Beat/2022

Restaurants say their newly hired employees are already demanding the first in a series of minimum wage increases even though the hike is not yet in effect, and older employees also want their paychecks raised accordingly.

“You have heard of the trickle-down effect, we have a trickle-up effect,” says Glander.

Worker shortages also impact restaurants in countless other ways. There are not as many people to grow food. Fewer people are working in factories to make processed food and there is a shortage of drivers.

“I have had days when I couldn’t get a delivery because the vendor did not have anyone to drive the truck,” Glander said.

Restaurants are also heavily impacted by increased costs of energy that affect every aspect of their operations from the cost of the delivery of their products to electricity to keep their dining rooms air-conditioned and lighted as well as to run massive refrigerators and dishwashers and natural gas to heat their stoves and ovens.

Their costs to maintain and replace equipment has risen. And there are costs restaurant patrons might not think of such as the increase in cost for broken plates and wine glasses, for the latex gloves worn by food handlers and for containers for takeout food and beverages.

Teddy’s Bigger Burgers, a local chain for hamburger and sandwich service, says continuing effects of the pandemic and inflationary pressures have caused it shut down four of its 11 restaurants.

“This is an unprecedented time. It is extremely difficult to run a successful restaurant operation. We expect to see our costs continue to increase,” said Turhan Folse, chief financial officer for Teddy’s and the chain’s two Tex 808 BBQ and Brews restaurants.

Folse says the price hikes for almost all of its food products have been big; an 80% increase for each chicken breast it cooks for Teddy’s grilled chicken sandwiches and the cost of buns for hamburgers has shot up five times in a single year.

He says environmentally friendly food containers now required by law cost 50% more than the recycled plastic containers the company used before.

“To survive we have cut our menu choices in half to focus on our core items,” he says.

Teddy’s Bigger Burgers like other restaurants has been able to hire new workers but it has a difficult time keeping them because they when they start working the restaurants are already understaffed; the freshly hired employees get stressed and quit, generating a vicious cycle of continued understaffing.

“The pandemic has created a hole that is difficult for all businesses to dig out of, “says Folse.

Sky Ogata, manager at Big City Diner in Kaimuki taking dishes from the dishwasher at the restaurant in Kaimuki. Civilbeat Photos Ronen Zilberman. August 15, 2022.
Sky Ogata, manager at Big City Diner in Kaimuki, takes dishes from the dishwasher. Restaurants are seeing customers return after the pandemic slowdown, but they’re struggling with supply chain issues and other costs. Ronen Zilberman/Civil Beat/2022

Lane Muraoka, the owner of five Big City Diner restaurants on Oahu, says family restaurants such as his are having the most difficult time staying afloat because they lack the staying power of mega-chains such as McDonald’s and Starbucks or the ability of luxury restaurants to attract customers for special occasions no matter how high the price of the meal.

“We now pay anywhere from 40% to 300% more for the food and services we need to turn out meals. We can’t raise our prices to match that or we will drive ourselves out of business,” says Muraoka.

He says the increase in energy costs alone is enormous. “It costs me $600 in electric and gas costs just to keep one restaurant opened for a single day.”

Harris, the restaurant marketing consultant whose Hawaii Food Gurus index tracks 4 million separate transactions a month in 150 restaurants statewide, says many casual and quick service restaurants have had to sit on price increases.

“Providing value is part of their DNA,” he says.

The University of Hawaii Economic Research Organization in its current forecast shows the rate of inflation slowing to 6.7% by the end of this year; 4% next year and 2% in 2024.

But UHERO executive director Carl Bonham says, “That does not mean businesses will lower the high prices consumers and restaurant patrons face now.” The high price to eat out is most likely here to stay.

Glander says restaurants will survive despite having to pass on to their customers higher prices to cover some of the soaring costs they now pay to operate.

“Restaurants are not going away. They provide more than just sustenance. They are a social venue for people to meet and relax. They are part of the fabric of modern life,” he says.


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About the Author

Denby Fawcett

Denby Fawcett is a longtime Hawaii television and newspaper journalist, who grew up in Honolulu. Her book, Secrets of Diamond Head: A History and Trail Guide is available on Amazon. Opinions are the author's own and do not necessarily reflect Civil Beat's views.


Latest Comments (0)

The possible result of this "reality" is that fewer will be dining out, hence prompting even higher prices, in turn accelerating the eventual demise of many restaurants.As we’re forced to cope with less real buying power, our lifestyles will inevitably change. Which, while sad for many, can offer some opportunities for healthier eating habits.And while many want to blame politics, and I do believe to varying degrees they’re right, overall there are significant other factors involved as well.If followers of both current ideologies were able to acknowledge the latter then perhaps mitigating solutions could be mutually achieved.

hawaiikone · 1 month ago

I greatly appreciate that this column highlights the challenges that small restaurants face. However, it may give the misleading impression that Hawaii minimum wage increases and environmental protections are big drivers of these challenges. Small restaurants are facing these challenges across the nation, including in Republican-led states without minimum wage increases. I hope future columns delve more into Mr. Muraoka's comment about the disadvantages small businesses face compared to mega-chains.

LeoRun · 1 month ago

I forget now.Was this such a problem under the previous Administration?

Gordyf · 1 month ago

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