At the best of times, restaurant owners operate on thin margins. Now, rising costs are making it even more difficult for independent restaurants to survive. Jenna Petersiel, owner of Chilmark Tavern on Martha’s Vineyard in Massachusetts, spoke to CBS MoneyWatch about how she keeps her business afloat. This interview has been edited for length and clarity.
Jenna Petersiel
How has this bout of high inflation affected your business?
Jenna Petersiel: Inflation wise, the cost of goods for me on Martha’s Vineyard has always been high. And so when it goes up like it is now, it’s very hard for us to adjust our prices to reflect a proper profit margin.
I always feel like, “Oh my God, am I charging too much money? Is what I’m charging right now worth it?” For me, the biggest challenge around this is early customer perception. How much can we charge for food without people feeling ripped off?
Since you are finding it difficult to raise your menu prices, can you still be profitable given how costs are rising?
We never charge enough here. Chilmark is a dry town, so we’re BYOB, and most restaurants make all their profit on the alcohol and are lucky if they break even with the food. We have to earn money from food to cover all costs. I’m stuck in this place where I’m like, “How high can we go until it’s just not okay?”
Economic growth has slowed sharply this year and there is a risk of recession. How does this affect you?
I live in a constant state of fear. It’s always, “What’s the concern this week?”
As for recession fears, it seems my customer base is kind of recession proof. But I’m finding that customers who used to come two or three times a week are dining here a little less often. I don’t know if it’s based on diet, age or COVID, or recession fears. I don’t ask them, but I’d like to.
COVID-19 is still around. Have there been any cases among your staff?
I was fully staffed and expected to be overstaffed, which is a miracle in this market. Then, a little over a month ago, our sous chef and line cook were in a terrible car accident and one of them died.
Right after the accident, we were closed for five days. We reopened overnight, then I tested positive for COVID and the entire kitchen staff tested positive for COVID the next day. We were all sick and closed for another week. This was the first COVID illness we have had in the restaurant since the COVID happened.
We had to close even though we had bought food, we had perishable food, but there was nothing we could do with it. We saved what we could and had to throw a lot of stuff away, which is horrible. We missed the two weeks leading up to the 4th of July, which are usually tremendous weeks for us.
We usually have a 24-hour cancellation policy as well, but people say, “I can’t come in because I just tested positive for COVID.” I don’t know if they did or not, but I can’t tell them they’re lying.
Many restaurants say they are understaffed, but this has not been a problem for you. What is your secret?
Right now, what’s important to me is making sure our kitchen staff is well paid and appreciated. Sometimes that takes precedence over making sure the restaurant is profitable, because it’s hard to see people working 16-hour days in a 110-degree hot kitchen and not making enough money. I don’t want to be that kind of boss, pushing people to the limit.
I think it was word of mouth that I am good to work with and am a friendly employer. I’m always looking for a dishwasher. I think it will be eternal for the rest of the time in restaurants. You will always be looking for a dishwasher, it is not a fun job.
So what is your biggest challenge right now?
The cost of goods and stay ahead. Also the cost of utilities, especially here on Martha’s Vineyard, has gone up. Electricians, plumbers and refrigeration repairs cost a lot more than they used to.
Even though my costs have gone up, I haven’t raised my menu prices that much because it just doesn’t feel right. Would you be comfortable paying $36 for a burger? That’s what it’s all about.
Are you a small business owner facing inflation and a slowing economy? If so, CBS MoneyWatch wants to hear about your biggest challenges and how you’re adapting your business. Email moneywatch@cbsinteractive.com.
Add Comment