California Restaurant Owner Says Prices and Inflation Allow Him to ‘Barely Break Even’

Inglewood, California — One family’s legacy Italian restaurant called Sunday Gravy, in business for decades, is now “barely breaking even,” says owner Sol Bashirian, as prices And inflation eat into its profits.

“It’s just the reality of where the food industry is,” Bashirian told CBS News, noting that he’s spending thousands of dollars more each month on imported ingredients.

His family has been in business in Inglewood, California, just south of Los Angeles, for decades, and has seen sales increase 30 percent since last year. But the family’s legacy could become obsolete.

“My dad made an offer, took all his savings and bought this place. And here we are now, almost 50 years later,” Bashirian said.

Financial analyst RJ Hottovy of Placer.ai – a real estate software company that advises restaurants in the US – says restaurants that cater to low- and middle-income consumers are suffer financiallyjust like their customers.

“This group is facing cost pressures on multiple fronts, not just food, but other things like rent and inflation,” Hottovy said.

A report released earlier this month by cloud-based management company Toast shows that 48% of restaurants surveyed plan to raise menu prices if costs continue to rise.

The National Restaurant Association says menu prices would have to increase 30.3% just to maintain a low 5% profit margin in current economic conditions.

“It sounds easy, but there is a process behind it,” Bashirian said. “It’s about reprinting a menu and the printing costs associated with it.”

Bashirian says the shock of a price hike could “absolutely” deter customers from coming to the restaurant.

“It’s pasta, and pasta isn’t supposed to be very expensive,” Bashirian said.

For now, Sunday Gravy is adding a 5% surcharge to the bill to offset the fares. Under California law, restaurateurs are allowed to add extra charges if they are “clearly and conspicuously displayed” on menus.

“There is price fatigue,” Hottovy said. “I think consumers have been paying higher prices for many years. And there is a breaking point for many of these consumers.”

The National Restaurant Association is pushing for imported food and beverages to be exempt from tariffs imposed by the Trump administration, arguing that the hikes could cost the industry billions this year alone.

“That would at least allow us to have a chance to fight and prosper and continue,” Bashirian said of the possibility of tariff relief.