Pizza joints may soon have to raise their prices to cope with soaring ingredient costs, a New Jersey restaurant owner said.
The restaurant industry is currently paying more for some ingredients because of supply-chain problems and falling production — and a shortage of workers is forcing them to push up wages, too.
It's "inevitable" that the higher cost of ingredients will be passed onto the consumer, Anthony D'Aniello, owner of Manville Pizza in Manville, New Jersey, told Insider.
"The end consumer, if there's a victim, is the real victim here," he said.
D'Aniello said that his supplier, who distributes across the US, had told him to expect "everything" to get more expensive — including flour.
"If flour gets increased, that's the biggest effect on my business because I own a pizzeria," D'Aniello said.
"You could see some restaurants seeing a 10% increase in their food costs," Kevin Burke, managing director and member of the consumer team at Citizens Capital Markets, part of Citizens Bank, told Insider. He said that produce, dairy, and protein had already become more expensive.
Some restaurants are passing the higher costs of labor and ingredients onto customers by "carefully" increasing menu prices, Burke said. Chipotle has already raised its prices by around 4%.
It follows a New York restaurant owner telling Fox Business that the prices of both chicken wings and fryer oil had more than doubled, while a New Hampshire restaurant said the cost of St. Louis Ribs were up 50%.
D'Aniello said that he had raised his restaurant's price for 10 chicken wings from $10.95 to $16.95.
He absorbed the costs himself at first, but "it's inevitable that it goes to the consumer, which I feel horrible about because I'm not making any more money, I'm not giving them any better of a product," he said.
D'Aniello said that his customers had been understanding of the price hikes so far, but warned that "there's only so high you could put a wing before the consumer will stop buying it and that'll eventually set the market price."
"The insignificant wing will be the canary in the coal mine for the industry," he said. "It'll set the precedent of how high they can go or where are they going to be."
Restaurants are hiking up wages to attract more staff. Around two-third of small restaurants say they're struggling to find staff, and half of restaurant owners are paying workers more now as a result.
Burke said that restaurants have other ways to offset higher prices, too. These include becoming more efficient and cutting costs, selling a higher volume of food, and slashing portion sizes.
But portion changes aren't as likely, Burke said, because it's impossible for some food types – burgers, for example, are based on standard patty sizes.
