Louis Pappas has been a popular Greek restaurant in the Tampa Bay area for decades. But for the first time, it is now charging a 10 percent fee at all seven of its locations to try to stay in business.
The now 67-year-old owner has survived economic challenges in the past, but he says this time is different.
“Prices are more now, and they average about 20 percent higher,” Louis Pappas said.
For his signature item, Louis Pappas’ famous Greek salad, the cost of the main ingredient has tripled. He says the price of a case of lettuce he orders from California went from $14.50 a case several months ago to $42 a case today.
According to the latest USDA Consumer Price Index report, the cost of all food is up about 10.5 percent this year. That’s compared to an overall average annual increase of 2.4 percent over the past 20 years.
“If I’m gonna stay in business, we had to”
After increasing prices and printing new menus a year ago, Pappas decided he had no other choice but to tack on a 10 percent inflation fee.
“I had to. If I’m gonna stay in business, we had to,” Pappas said.
“I think that’s a lot, but I still will buy the salad,” said customer Kaleigh Malone.
Added fees have had backlash in other places where consumers are already stretched.
Romano’s Macaroni Grill was hit with a class action lawsuit in June, alleging the restaurant “surreptitiously imposes a so-called ‘Temporary Inflation Fee’ amounting to $2” for each customer. The case was dismissed last month, but the company discontinued the fee.
“I think overall, people will consume less if the prices are increasing,” Malone said.
She believes that might drive away customers over time.
“95, 99 percent of the people understand. They go to the grocery store, for goodness' sake,” Pappas said.
Other factors also drive up costs
Pappas said he was not only hit by high food prices but also increased container, energy, and labor costs. And he’s paying entry-level employees almost 30 percent more than he did a few years ago. That’s good news for the 150 employees who work at his seven stores.
“Our people get paid very well. A 16-year-old kid can make $17 or $18 dollars an hour,” Pappas said.
But it won’t be good if inflation continues to rise.
“I hope it remains temporary. I hope prices stabilize, and I hope prices come down,” he said.