Runaway menu prices

Restaurant prices are rising during the current inflationary period, but this is scarcely the first time. In fact it’s at least the fourth in little more than a century.

The first was during World War I, particularly after the war ended. In response, many restaurants teamed up for cooperative buying to keep costs under control to a degree. Drugstore soda fountains and other inexpensive eating places gained a thriving lunch business, while first-class restaurants raised prices as they whisked away frills including cloth tablecloths and napkins. The average restaurant operator’s motto became “simpler, cheaper, faster.” In New York, the venerable Mouquin’s hiked steak prices, charging $4.50 for a porterhouse steak with mushrooms that had historically been only $1.00.

The tough business climate combined with Prohibition caused the closure of droves of fancy restaurants such as Delmonico’s, which had been sliding for a while.

Complaints mounted. In 1920 Chicago’s city hall called restaurateurs on the carpet to explain their high charges, as the “Carry-Your-Lunch” movement grew. Boston put a U.S. District Attorney on the job to investigate prices at the city’s popular restaurants, including The Puritan and The Pilgrim.

Restaurant workers wanted raises, but it was a bad climate for strikes. Chicago’s 1000-seat faux-luxe North American Restaurant sacked their striking waiters and installed a cafeteria line. Their advertising copy assured customers they didn’t need to tip because “There was no one there to tip.” At the same time the North American’s advertising championed low prices, the ballyhooed bargain-priced “whole baby lobster” shrank to half a baby lobster. Did they think customers wouldn’t notice?

Although World War II also raised restaurant prices, that did not dampen patronage by war workers who enjoyed higher wages than ever. The president of the Society of Restaurateurs reported that from 1941 to 1944 New York City’s 19,000 restaurants went from serving 3 million to 8 million meals a day.

Soon the federal Office of Price Administration tried to control prices at restaurants across the country by freezing them to April 4-10, 1943, levels. Restaurateurs found ways to skirt regulations by reducing portions and substituting “blue plate” specials for what had previously been a regular meal including appetizer and dessert. In addition to reducing food costs, the move also saved a lot of dishwashing. Quality and sanitation went down as patrons mobbed restaurants severely short staffed due to military recruitment and the lure of defense industry jobs. High prices continued through 1948 as did meat rationing. [Britling advertisement, 1942]

The “stagflation” of the 1970s was still to come, with inflation accompanying a stagnating economy – a situation similar to what some economists see looming today.

In 1970 consumer prices rose steadily, especially for food and restaurant meals. Soon New York maitre d’s became friendlier and even the city’s rich began to complain about costs. A wealthy woman who had never paid attention to prices and customarily ate out six or more times a week became angry at being charged over $4 for a melon wrapped with prosciutto at the Plaza’s Oak Room. A nationwide Gallup survey found that a substantial percentage of restaurant goers had cut back on evening dinners out.

A few years later famous NYC restaurants including the Colony and Le Pavillon failed. At the same time Chinese restaurants were prospering. Across the country, salad bars became popular as did fast food outlets and restaurants specializing in dishes such as pizza, pasta, and tacos. Books recommending inexpensive restaurants did well. By 1974 three chains – McDonalds, Colonel Sanders, and Burger King — were furnishing 13% of all food eaten outside the home nationwide. Five years later there were 66,000 franchise outlets in the U.S., nearly double the number in 1973. Elsewhere, doggie bags soared in popularity and some customers began packing away anything edible on the table. A few restaurants went so far as to remove tops from ketchup bottles to discourage patrons from carting off their ketchup. [above: 1970s fast food streetscape]

Printing houses could barely keep up reprinting menus as prices went up, up, up. And still the restaurant industry experienced heavy, some said “booming,” business – even though patrons were eating more hamburgers than steaks. Analysts thought it was due to the number of working wives, along with the fact that the hike in supermarket prices outdid restaurant price increases. The president of the National Restaurant Association reported that the country’s half million restaurants enjoyed rising sales throughout the mid-1970s, with 1975’s take 16% higher than the year before. Nonetheless the industry fought a proposed increase in the federal minimum wage from $2.30 to $3.00 an hour.

Despite continuing challenges, the economy began to improve in 1982, ushering in a period of gastronomic innovation in restaurants.

© Jan Whitaker, 2022

2 Comments

Filed under chain restaurants, food, restaurant prices

2 responses to “Runaway menu prices

  1. Maria

    “Runaway Menu Prices” by Jan Whitaker. As always, fascinating, relevant, & informative. A real treat!

  2. Anonymous

    Always interesting! Thank you

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