Rising costs of wheat, energy raise prices at local restaurants
April 6, 2008
Some local businesses have already felt the effects of rising wheat and energy costs.
Jason Wieser, Huskie’s Pizza manager, said the restaurant already had to raise its prices twice since opening in October.
“The cost of wheat and flour has gone up because of the rising economy, so now it costs more to make our pizzas,” Wieser said. Huskie’s charges $4.50 for a slice now, which has increased twice in 25-cent increments from the original $4.
Economics professor Khan Mohabbat said the reason wheat prices are going up is because wheat is the substitute for corn, which is being used for the production of ethanol.
“The prices of corn go up because of the demand for corn for ethanol, so the price of wheat goes up,” Mohabbat said.
Larry Finn, Pizza Villa owner, has also seen a 75 to 100 percent increase in flour and a 60 percent increase in cheese, but he has not changed prices for pizza. Instead, he has had to increase delivery prices three times since June due to the rising cost of gas.
“There are just a lot of people who would rather pay $1.50 instead of jumping in their car to get it,” Finn said.
Mohabbat said that since the cost for a barrel of oil has risen to about $110, it has affected all forms of energy, including gas prices.
“The cost of energy affects production cost, shipping cost, which in turn affects the grocery cost, which in turn affects the well-being of the average individual whose income has not caught up with rising cost of energy,” Mohabbat said.
Finn said they do plan on having a “sliding delivery fee,” in which the delivery fee will change as does the price with gas to be fair. Finn says he has been more aware of everything to save costs, including being more cautious with utilities.
Pizza Villa, which has been in business since 1956, has experienced past recessions and wasn’t affected much, Finn said.
“I just think people always go out, but maybe they won’t go out as often,” Finn said.
Huskie’s Pizza’s business has not been affected much, either. Huskie’s Pizza has been trying to come up with ideas to boost business — including its March 24 Customer Appreciation Day, when it lowered a slice’s cost to $4 for the day, Wieser said.
Huskie’s Pizza is also shopping around to different distributing companies and doing business with whomever is the least inexpensive.