Inflation forces Hamilton restaurants to raise prices, change ingredients or close

Eighteen months after opening his bakery on Barton Street East, Mike Jensen said he was making « one of the toughest decisions » he has ever made.

Mikey’s Cream Pies closes in mid-September due to the cost of food and supplies and a drop in new customers.

« It’s been tough the last few months – food prices keep going up, » Jensen told CBC Hamilton.

Its intention to close shop comes amid rising food inflation rates.

While the headline inflation rate in Canada eased slightly in July, the food inflation rate rose to 9.2%, a drastic increase from 3.6% in August 2019, according to Commercial economy.

Soaring food inflation, coupled with rising ingredient and takeout costs, is forcing business owners in Hamilton and across Ontario to adapt.

« We eat costs first »

Erika Puckering, co-owner of The Electric Diner in Hess Village, said her restaurant had to change some ingredients to avoid raising prices – but sometimes that still wasn’t enough.

“We eat the costs at the start and reduce them when we release a new menu so that it also aligns with the new products,” she said.

« We don’t want to have to reduce the quality or quantity of ingredients. »

Both Puckering and Jensen said loyal customers are still visiting and making their own adjustments.

« What’s really killing restaurants right now is the packaging…the packaging alone has increased the cost of my pies by $1.50 per pie, » Jensen said.

« Instead of a nine inch, they get a six inch because they can’t afford the biggest pies. »

Pete Mitropoulos, head chef at Thirsty Cactus Cantina and Grill in Dundas, said there were also unpredictable supply shortages.

« You don’t know from week to week if you can get some of the major things you need to run the place and that’s pretty tough, » he said. « On top of that, you’re paying a fortune for them. »

« I definitely feel the love »

A Statistics Canada analysis from early June said supply chain issues are expected to continue into the second half of the year, but Puckering said there was a silver lining – a steady stream of repeat customers.

« We’ve been pretty flat this summer, up from last year, » she said.

« For the most part, our general audience in Hamilton is made up of foodies…people always tip well. We just have to adapt. »

Although Jensen will soon be closing its doors, its appreciation for customers is unwavering.

Every week until the bakery closes, Jensen said he was giving away a special pie and other goodies from the past 18 months.

« I’ve met so many amazing people, made so many connections. I’ve laughed, cried and hugged. You’ve embraced me, my outlook and my weird sense of humor and marketing, » said he wrote on Facebook.

« I definitely feel the love. »