Study finds widespread hiking of prices in island restaurants
By The Star Staff
The Puerto Rico Restaurants Association (ASORE by its Spanish acronym) presented an update this week of the “Projections” study it developed in collaboration with the firm Economic Intelligence, in which they revealed a price increase in restaurants due to the local economic situation.
“We are committed to generating and sharing knowledge about the restaurant industry in Puerto Rico,” ASORE president Mateo Cidre said in a written statement. “Through the Projections study, we seek to understand the challenges facing our sector and work together to find solutions that promote the profitability and sustainability of businesses.”
First off, the measures taken by restaurants to meet the current challenges were highlighted. Some 75.9% of the establishments surveyed have chosen to increase prices in all menu categories, while 62.1% have reduced other expenses. In addition, 44.0% have had to reduce the number of employees or adjust work schedules to suit circumstances.
In terms of revenue and sales, although restaurants have experienced an increase in revenue compared to the same period last year, a reduction in sales has been observed when compared to the last quarter.
It was noted in the study that significant days, such as Valentine’s Day and Mother’s Day, have reported minimal increases in sales for the most part. Industry perception and conditions were also addressed at the event.
According to respondents, 43.6% consider industry conditions to be bad or even worse. However, surprisingly, only 27.6% state that their own business is experiencing difficulties or worsening, indicating a diversity of situations in the sector.
Finally, an increase in menu prices was highlighted, which in most cases has exceeded 5% (42.5%). The measure has been adopted to address the economic and operational challenges faced by restaurants in Puerto Rico.
Looking ahead to the remainder of 2023, respondents identified the inventory tax, the cost of electric power, and labor costs/minimum wage increase as the top obstacles to maintaining profitable and sustainable operations.
“The development of a bank of indicators and the continuous development of analysis of the restaurant industry is an important achievement for the business community,” said Gustavo Vélez, president of Economic Intelligence, who also urged the government and the Legislature to look at the ASORE analysis before making decisions that impact the industry.