Risings costs force local restaurant to add ‘adversity surcharge’
WICHITA, Kan. (KWCH) - As restaurants across the country continue to face rising costs for food and labor, one local restaurant has been up front about its economic struggle.
Openly displayed on the menus at Napoli Italian Eatery is an alert about an extra charge on bills, in place since last summer. It’s called an economic advisory surcharge.
Jeremy Wade is the owner of Napoli and Magnolia Café, both restaurants in northeast Wichita that opened during the COVID-19 pandemic.
“Restaurants operate on a very slim margin as it is. When inflation creeps around 10%, your labor costs increase 30%,” Wade said. “It’s very difficult to manage and maintain.”
To combat rising costs for food and labor, Wade added the 3% surcharge.
“It certainly doesn’t cover all of those costs,” he said.
One example Wade highlighted is the cost of eggs, which he said is up to about $90 a case, compared to $20 last year.
“Anything that has to-go supplies; petroleum products are up 200 to 300%. So, 3% I thought, was a small charge to cover some of those expenses,” Wade said.
On his menus, Wade’s customers can read the explanation for the surcharge, the result of supply chain difficulties and increasing operational costs. Regular customers at Napoli said they don’t mind the surcharge.
“Since this is their livelihood, that if we don’t support them, we’re losing business right and left in Wichita,” customer Diane Wingate said. “So, I would like to keep some good restaurants.”
Wade employs about 45 people between Napoli and Magnolia Café. He said paying his staff well is a top priority.
“I have great employees, both here and there,” he said. “The staff [at Magnolia Café] does a good job. “It’s all about great people. Great companies rely on great people.”
Wade said he hopes inflation will decrease enough to eventually remove the surcharge.
“Hopefully, things can calm here in the near future and we can go back to normal, normal prices,” he said.
The president of the Kansas Restaurant and Hospitality Association said increased and unpredictable costs for food and supplies, on top of two years of reduced revenue due to the pandemic greatly challenge the business model of restaurants, which he says, is an already low-profit business. He added that his association appreciates the support and patience from the loyal customer base.
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