Despite prosperity of wealthy region, restaurants and retailers are ‘crushed’ as inflation worsens after 2020 shutdown – Daily Local


NEW GARDEN – The good life has never been cheap. Nowadays, living well has become even more expensive.

And that doesn’t equate to the pursuit of life just to survive, to provide food and shelter for yourself and your family – and most importantly, to thrive.

“Almost every business faces challenges,” said Guy Ciarrocchi, executive director of the Chester County Chamber of Commerce and Industry.

“The businesses most affected during shutdowns are the most affected by inflation and staff and supply shortages,” he said.

“For family businesses and their employees, it’s almost crushing them. They are not only understaffed, facing supply shortages and facing debt due to lockdowns; they now have inflation – with prices increasing every week. Everything costs more. They have to wrestle with how much to pass on to consumers, without losing customers. “

A Republican, Ciarrocchi is running for governor to become Pennsylvania’s next governor.

The Chester County resident said almost everyone knows inflation is happening in America today and it’s a real problem.

The good news is, according to Ciarrocchi, there are very few reports of customers frustrated by managers, owners or staff.

“Try to buy local,” Ciarrocchi said. “Please go the extra mile and continue to be understanding. “

Ciarrocchi said gasoline and food prices were rising every week or every day.

“We are all about to feel the pain of heating our homes,” he said, adding that he was concerned that many families could see heating prices rise to almost double their rates. 2020 utilities.

“The combination of inflation, staff and supply shortages and debt can crush very local businesses that are struggling to recover and reopen after closures,” Ciarrocchi said.

The cost of inflation has a big impact on restaurants in particular.

“We are faced with problems every day. Increased costs are happening for many products, ”said Dave Magrogan, owner of Harvest Seasonal Grill and Wine Bar with eight locations, including Glen Mills.

“Wages have gone up, the cost of living seems to go up even more. This is not the easiest time for businesses or our clients, ”he said.

“Supplier fuel surcharges and reduced deliveries are also occurring due to labor shortages and supply chain issues. Profitability declines as product costs, utilities, fuel, patio propane costs and labor costs increase rapidly, ”said Magrogan. “Costs seem to be increasing every week, and supply chain issues are also changing rapidly. “

Still, there is hope. “Our customers have been very understanding and our relationships with so many local farmers and vendors have allowed us to avoid dramatic price increases. We are lucky that we don’t sell chicken wings and some products that have seen a big spike, ”Magrogan said. “Steak and seafood prices are our biggest concerns, but again, bringing in trusted local suppliers helps. We have seen prices go up in all food categories.

In 2020, the ripple effects of the pandemic shutdown caused many businesses to shut down permanently, including in Chester County, two local landmarks that have shut down permanently include Christopher’s in Malvern and The Barrel Wine Bar & Restaurant in Phoenixville.

Now that 2021 is drawing to a close, the cost of goods and services has collectively skyrocketed across the country. And with the holidays approaching, demand is on the rise.

“The restaurant industry has absorbed increases in labor costs and product costs all year round,” Magrogan said. “Recently we have seen our food costs increase by an additional 4 points, which is the first time in my years in the industry that I have seen such a rapid increase.”

At the same time, not only is there a shortage of everyday supplies, but some products are completely out of season, from the artisanal soft Hummingbird cheese from The Farm at Doe Run in West Marlborough Township to classic Italian pasta from everyday. available at Giant in New Garden Township,

“We have the chance to change our entire menu every season,” said Magrogan.

For example, lobster was supposed to be on the Harvest Seasonal Grill and Wine Bar’s summer menu, until the price rose too high just in time to change the menu before it was printed, he recalls. Plus, Magrogan’s business is seeing prices rise across categories – from black beans to steak, napkins to togo containers.

Besides retail and restaurants, service providers are also feeling the pressure of the financial heat this winter as inflation steadily rises in Pennsylvania and across the country.

Charles Swope is the Managing Director of Swope Lees Commercial Real Estate in West Chester. “Fortunately, we are not directly significantly affected by our business operations,” Swope said of inflation. The company offers small professional services and therefore does not require a significant amount of consumable resources or items closely related to inflation to run the office, he noted.

However, “when it comes to commercial real estate, our ‘product’, we see significant increases in construction costs and the value of existing properties generally increases. This is particularly visible in the industrial and flex sector; the desktop remains soft to stable in most cases, ”said Swope.

Further, he said that industrial and flexible property prices are attractive, but the market is the intersection of what a seller or owner is willing to accept and what a buyer or tenant is willing to accept. to pay.

“Based on the scarcity and high demand, these numbers are getting higher and higher,” Swope said.

Customers understand that some prices have gone up, he said.

For example, “Building materials and labor are scarce and their cost has increased dramatically by around 30-40% year over year. “
Swope continued, “Everything is cyclical. Make decisions that work for your long term goals and don’t focus on perfect timing.

“We drive with the punches,” said Brett Sholder, owner of Sky Motor Cars in West Chester. “We are in a ‘supply-demand’ economy where the cost of doing business is constantly changing. “

For car dealerships, including motorsport sites, “it’s impossible not to know that prices have gone up in every area, both in our business and in every other. The used car industry is booming at the moment as there are very few new cars to be found at the moment. If anyone needs a car now – today – their choices for new cars are slim to none, ”Shoulder said.

There is currently a shortage of chips affecting most automakers except Volvo which stocked the product before the crisis globally which is a key component of new cars. As a result, auto dealerships are paying top dollar for used vehicles in the United States, hoping to add inventory, especially before the holidays.

“We are currently selling most of our inventory to other dealers at a high cost as dealers across the country are struggling to keep their lots full,” Shoulder said.

In terms of inflation, he said, “The price of gas seems to be the biggest change we’ve seen. It definitely makes people’s choices about their mode of transportation more important. $ 4 per gallon is the new $ 2 per gallon. “

However, nothing can replace buying locally. “The Carvanas of the world lack customer service and if you have a problem with anything from paperwork to problems with your car, you’re stranded on an island,” Shoulder said. “Brick and mortar are here to help. “


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