Many small businesses had a hard enough time trying to stay afloat during the height of the COVID pandemic, but now the prolonged period of skyrocketing inflation is causing further struggles for businesses.
One iconic Atlanta restaurant was forced to “hit the nuclear button” and raise prices due to the squeeze on inflation. Manuel’s Tavern owner Brian Maloof said this has “never happened in our 67-year history.”
“The price increase is so unusual for us. It’s never happened in the history of the tavern to have an across-the-board increase. It became absolutely necessary because the math was no longer working. The math that had worked historically, forever was no longer working, and it was directly related to inflation and non-manager controllable cost,” Maloof said on “Fox & Friends” Thursday.
Manuel’s Tavern has been known as the “people’s pub” and prided itself on keeping prices lower than competitors.
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In the aftermath of the pandemic, non-manager controllable costs have steadily increased as inflation has hit nearly every aspect of the economy.
Maloof shared that the tavern was already feeling pressure from increased food and liquor costs as well as labor, but that in recent months, vendors were increasing costs by upwards of 10%.
While holding off as long as possible, Maloof had to either raise prices or close the doors. In order to survive, he raised prices across the menu by about 6.5%.
Being the “people’s pub” with long-time loyal customers, Maloof wrote an open letter to the restaurant regulars on Facebook to inform them of the menu changes.
“Volume and value have been what’s gotten us by for so long,” he said. “To do this big price increase, I felt like I needed to notify our loyal customers because it was very unusual. It’s never happened in our 67-year history,” Maloof said.
Inflation, however, was not the tavern’s first roadblock. During the height of the pandemic, the restaurant was almost forced to close down.
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The beloved restaurant was saved, however, through a GoFundMe page as well as Maloof dipping into some of his savings.
With inflation plaguing the restaurant industry and in particular small businesses, Maloof is not alone in his concerns.
The Small Business and Entrepreneurship Council (SBE) released its Small Business Checkup Survey on Thursday, which found 85% of owners expressed concern about an economic slowdown or recession in the coming months.
Some 73% of respondents told the surveyors that inflation was having either a somewhat or very negative impact on their businesses, with 55% answering that their revenues have not kept pace with rising prices over the past year. Fifty-seven percent said they plan to cut back on business spending as a result.
The most recent consumer price index data from the Labor Department shows prices rose 0.1% in March from the previous month, down from 0.4% in February. Prices climbed 5% on an annual basis, down sharply from February’s 6% increase and the smallest rise in nearly two years.
Still, inflation remains about three times higher than the pre-pandemic average, underscoring the persistent financial burden placed on millions of U.S. households by high prices.
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“The big thing for us was that we were eating the cost as long as we could possibly do it, thinking, hoping, praying that prices were going to stabilize and they were. Commodity prices on food and proteins were coming down and everything was looking good,” Maloof said, adding that in recent months his costs have exploded again.
“It was dramatic how much everything went up.”
FOX Business’ Breck Dumas and Megan Henney contributed to this report.
