Local restaurants hit by rising ingredient costs

In the national policy-making arena, leaders call it stagflation, but here in New Haven, Yorkside Pizza & Restaurant co-owner George Koutroumanis simply calls it a pain.

Rising costs for cooking ingredients have Koutroumanis and at least one competitor frowning at their receipts.

“I’ve never seen prices like this,” Koutroumanis said. “Between utilities, taxes, health insurance, property insurance … prices have been skyrocketing at astronomical rates.”

The U.S. Commerce Department reported in December that the high cost of energy, food and other “crucial goods” has contributed to rising inflation. In the third quarter of 2007, the prices of consumer goods rose 1.8 percent, but in the following three months, the same prices saw an increase of 3.8 percent.

Rising energy costs have contributed to this increase. The USDA reports that the farm price of corn has risen from $2 to $3 in the past year because of steep demand for ethanol production.

Retailers may soon be forced to pass these higher commodity and transportation costs on to consumers, several restaurant owners said.

And in Koutroumanis’ words, “The best lettuce comes from California.”

Of particular concern for Yorkside is the price of its flour, which has risen from around $13 to $18 in the last eight months. Prices for olive oil have also hit new highs, Koutroumanis said.

“The last year has been the most horrendous year in terms of prices,” he added. “We’ve probably gotten a 25- to 30-percent increase in prices [of ingredients] in the last year, and we’ve had to go up 10 percent in prices [of menu items].”

Unless they continue to raise menu prices, small restaurants may soon experience profit loss. But when a restaurant owner faces upwards of $3,000 to print new menus, he must think twice about gains and losses, said Ali Yaglidere, manager and owner of A-One Pizza, who cringed when he mentioned the $4,000 price tag for the endeavor.

While wholesale food prices have been constantly on the rise — especially for items such as cheese, tomatoes and meat — restaurant owners cannot easily change their menus to reflect these increases because of the printing costs, Yaglidere said.

“[Yorkside] milkshakes are $5 now!” Marisa Poverman ’10 exclaimed. “Last year, they were $4.25, which was a bit of a stretch anyway, so this is just over the top.”

But according to an informal survey of about 25 students, many Yalies are unsure of the current prices of some midnight snacks. When asked the price of a small cheese pizza at Yorkside, respondents named a wide range of values — anywhere from $8 to $12.

The actual cost is $7 plus tax.

“It’s probably $9.99,” Kristin Baxivanos ’10 guessed. “I wouldn’t notice if they raised the price of an entire pizza pie. But if they raised the price of a slice, I would notice.”

Nick Bayless ’10 said the two restaurant owners must also be wary of the competition, especially when the distance between Yorkside and A-1, for example, is only a block.

“If one restaurant changes its prices by very much, and another close restaurant doesn’t, people are going to gravitate toward what’s cheapest,” Bayless said.

Bayless is a staff photographer for the News.

Added Koutroumanis, “It’s always a balancing act.”

–Bharat Ayyar contributed reporting.

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