A steady diet of energy hikes has restaurant owners raising or preparing to raise their menu prices, an alternative to tacking on a 2 to 4 percent energy surcharge that some were considering placing on bills.
"Many restaurant operators are raising their prices or are strongly considering it. Very few people are putting on surcharges," said Jeff King, chief executive of Long Beach-based King Seafood Co., which owns the Pine Avenue Fish House, 555 restaurant in Long Beach and the Water Grill in downtown Los Angeles. "I think most people who run restaurants believe that it's better to do a slight price increase than to do something that might be viewed (as a gimmick) and drive away customers."
King said his firm's restaurants instituted a 3 percent price hike in April.
A poll conducted in May for the CRA found that 34 percent of respondents definitely would oppose surcharges, and an equal percentage would be much more likely or somewhat more likely not to dine out as often if surcharges were applied. The idea of turning off one-third of their customers with a surcharge could temper enthusiasm for the practice.
"I'm not a fan of surcharges," said David Stockman, senior vice president of Lawry's restaurants, which also runs the Tam O'Shanter in Los Feliz and the Five Crowns in Corona Del Mar. "As a businessman, I'm reluctant to put our costs right out in front of our customers that way. It's a burden to them.
"I know that, as a consumer, I resent surcharges myself," Stockman said. "My attitude is, just put it on the bill as the price and I'll decide if the price is right for me."
Although energy costs have risen almost 30 percent over the past year at his company's restaurants, Stockman said menu prices have not been raised this year. "But we do reserve the right to raise them," he said.
They're also holding the price line at the family-owned Papadakis restaurant in San Pedro.
"We're just taking the (energy cost) hit ourselves," said Taso Papadakis, who helps his father, John Papadakis, run the longstanding establishment.
As for instituting a surcharge, Papadakis said absolutely not.
"The last thing customers want to be reminded of when they come to a restaurant is a utility bill," he said. "They can see that at home. They're here to relax."
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