Restaurant operators adopt cautious optimism about the year ahead

The new year has brought a cautious sigh of relief to Columbus restaurant owners. The industry is finally shaking off the worst of the Great Recession, and price increases for staples such as meat and produce have slowed.

Columbus restaurateurs say 2014 will be a better year, but they acknowledge facing a slew of new pressures and challenges.

“It feels like the market is coming back, and the public feels better about the economy; 2008, 2009 and most of 2010 were lean for most restaurants,” said Craig Barnum, owner of Tucci’s in Dublin and co-owner of other restaurants, including Matt the Miller’s Tavern and Langton’s Irish Pub in Carmel, Ind.

But, “The same challenges exist today as they will tomorrow — how do we increase sales and decrease costs? How do we handle and deal with Obamacare and food and beverage prices that continue to increase consistently across the board?”

It’s true that restaurants face less-than-rosy economic conditions. Ohio’s minimum wage rose on Wednesday by 10 cents an hour, to $7.95, and by a nickel an hour for tipped employees, to $3.98. Gas prices remain stubbornly stuck north of $3 a gallon, crimping the budgets of families who have faced slim pay increases since 2008.

It’s enough to keep Mark Ulrey up at night. “We are sensitive to local economic issues, specifically concerning disposable income, energy prices and food costs,” said Ulrey, the vice president of marketing and purchasing for his family’s local pizza chain, Flyers Pizza. “It seems like every time gas is high — $3.60 a gallon or more — our sales are affected because of the customers’ lack of disposable income. The correlation of gas prices and sales seems to affect us in every quarter of the year.”

The requirement for companies to provide health insurance for employees under the Affordable Care Act also has been a concern. There’s worry about how well the health-care exchanges will ultimately work and about the cost to cover workers.

This year, “We found that it was less-expensive for our employees to buy off the market exchange than for our group to buy together,” Ulrey said. “We will be paying the penalty for 2014, but we will review the situation every September before we make a decision for the following year.”

Folks at the Columbus Food League, the parent company of Dirty Frank’s Hot Dog Palace, Surly Girl Saloon and the Grass Skirt Tiki Room, are particularly concerned about food prices.

The U.S. Department of Agriculture says the back-to-back years of nearly double-digit percentage increases in food prices are finally over. The agency predicts that prices of meat and fresh produce will increase by 2.5 percent to 3.5 percent this year. The cost of restaurant meals overall will rise by the same amount.

“Food costs continue to be an issue,” said Elizabeth Lessner, founder of the Columbus Food League. They “began to rise dramatically just as the recession hit, and are continuing to creep up. Meats are up across the board, and items we used to rely on to bolster our bottom line are no longer purchased cheaply. Even hot dogs, the ultimate budget food, have increased by 25 percent in recent months.”

But it isn’t all gloom and doom. Although restaurant visits are expected to increase only slightly from 2013, the people who go out to eat will spend more, predicts the NPD Group, an industry research firm.

Specifically, restaurant visits are expected to rise 1 percent in 2014, but the amount of money spent at each visit is to rise 3 percent.

Gourmet coffee, doughnuts and fast-casual restaurants are expected to have a great year.

“It’s a great time to be living and doing business in Columbus right now,” said Chris Crader, owner of Harvest Pizzeria and the Sycamore in German Village. “There are so many projects and areas under development. I really feel that Columbus’ economy is one of the strongest in the nation, making it relatively recession-proof.”

“People are going back out to eat,” said Columbus restaurant consultant Bob Welcher. “The economy seems like it’s gaining momentum going into 2014. Labor and food costs remain the two biggest obstacles, but they always are. That’s not a new problem.”

Although the industry is still extremely competitive, that competition is a boon to the dining public.

“I’m seeing some clever operators out there who have developed neat concepts,” Welcher said, mentioning the food-truck scene and the emergence of new gastropubs.

“Owners are reinventing and trying new things, and that’s how it’s got to be in tough times. Restaurants need to rise to the top to make it.”