Inflation hits highest since 1982: NPR

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Cameron Mitchell operates 60 restaurants in more than a dozen states. The increase in spending has forced him to increase menu prices three times this year.

Cameron Restaurants


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Cameron Restaurants


Cameron Mitchell operates 60 restaurants in more than a dozen states. The increase in spending has forced him to increase menu prices three times this year.

Cameron Restaurants

If you think your grocery bill has skyrocketed this year, you can understand what happened to Cameron Mitchell.

Mitchell buys about 60 restaurants he runs in cities across the country – from upscale steakhouses to Molly Woo’s Asian Bistro and El Segundo Mexican Kitchen.

Mitchell says the cost of his ingredients has climbed to around $ 9 million. As a result, he has been forced to increase menu prices three times this year.

“There isn’t a restaurant out there today that can survive without putting up with the price increases,” Mitchell said. “I think people understand that. They see it in grocery stores. They see it at gas pumps.”

For many businesses these days, the question is not whether to increase prices, but how often and at what level. Inflation in November was 6.8%, the highest since 1982, when Ronald Reagan was president. Food, fuel, rent, and cars were among the major contributors to the price hike.

The surge in inflation reflects a mismatch between strong demand and consumer supply that is still hampered by transport bottlenecks and a shortage of available labor.

Mitchell’s wholesale prices for beef and seafood soared particularly high. But even products now have additional shipping costs, to help pay truck drivers. Mitchell also pays more for his servers, cooks and dishwashers.

“In my opinion, the $ 15 minimum wage argument is over, because nobody pays less than $ 15 anymore,” Mitchell says. “All of our hourly associates are seeing their wages increase, which I think is a good thing for our industry.”

Knowing when and how to pass those costs on to customers is a mixture of science and art, Mitchell says. Diners who buy the $ 66 filet mignon at his New York steakhouse might have more flexibility than someone who eats a cheeseburger at his restaurant in Dublin, Ohio, which sells for $ 13.49.


More expensive meats and drinks are on the menu at Cameron Mitchell restaurants, which operate 60 restaurants across the country – from upscale steakhouses to Molly Woo’s Asian bistro and El Segundo Mexican cuisine.

Cameron Restaurants


hide caption

toggle legend

Cameron Restaurants


More expensive meats and drinks are on the menu at Cameron Mitchell restaurants, which operate 60 restaurants across the country – from upscale steakhouses to Molly Woo’s Asian bistro and El Segundo Mexican cuisine.

Cameron Restaurants

Even discounters raise prices

For Peter Elitzer, who runs a chain of discount clothing stores stretching from the northeast to the Great Lakes and south to North Carolina, any price hikes are a big deal.

“Our entire business model is based on value: 95 to 98% of our merchandise sells for $ 30 and under,” Elitzer said. “It really is Central America that is going to feel the greatest pain about this.”

But like Mitchell, Elitzer has seen his own costs rise. The starting salary for employees of its Label Shopper stores has risen to an average of $ 15 an hour. And the cost of goods – most of which are shipped from Asia – has increased dramatically.

“You can absorb some costs,” Elitzer says. “But you can’t take an average 20% cost increase and shut it down [at] the same retail business [price]. It just doesn’t work. “

Elitzer had to sharpen his pencil, raising the prices of some items and dropping others that became too expensive.

“If the $ 5 shirt goes down to $ 6, it probably won’t hurt things too much,” he says. “If something that cost $ 19.99 and suddenly it has to be $ 24.99, you’re going to sell less of it.”

Dollar Tree waives 35-year contract

However, in a growing number of cases, businesses are finding that consumers are willing to pay more.

Even the Dollar Tree discount chain decided last month it was time to pass the buck. After decades of selling most items for $ 1, the chain is increasing its average price to $ 1.25.

A survey by the National Federation of Independent Businesses found that 57% of businesses increase their prices, while only 6% reduce their prices. This is the most imbalanced ratio since the early 1980s, when inflation was in double digits.

Certainly, some of the main drivers of inflation are already retreating. Gasoline prices have fallen an average of 8 cents per gallon over the past month. And natural gas prices are down, easing concerns about skyrocketing heating bills this winter.

“Prices are down about 40% from their peak this fall,” said Matthew Palmer, senior director of global gas at IHS Markit. “Warm weather certainly plays a role in that. But overall I think the market is better supplied than it was, say, a couple of months ago.”

However, other factors, such as rising rents, could keep inflation stubbornly high for months to come.

At the White House on Friday, President Biden acknowledged the difficulties caused by the price hike.

“It affects families,” Biden said. “When you walk into the grocery store and pay more for everything you buy, it matters. “

Elitzer started his clothing business in 1970, and he remembers what high and persistent inflation is. It regularly eats away at people’s purchasing power. But it can also be a motivator for buyers looking for good deals.

“There’s a strong tendency to think, ‘I’d better buy it now because it’s going to be more expensive if I buy it later,'” Elitzer says. “It’s fundamentally unhealthy for the economy. It’s really unfair for the consumer. But as a retailer, that’s not necessarily a big negative.”

The danger is that if people get used to the rise in prices and come to think that they are going to continue to rise, it is more likely that they will.


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