The New York herald., 1921-04-04
IN. Y. RESTAURANT
PRICES CUT 20 PC.
in LAST 7 MONTHS
Chicago Plan to Base Rate
on Double Wholesale
Cost Is Favored.
LABOR ONE BIG ITEM
Increase of 20 Cents in Gas
Also Important Addition
to Overhead.

New York restaurateurs. particularly
those operating high class and medium
claas establishments, and exclusive of.
the so-calleo chain restaurants and
hotel dining rooms, agree with their
Chicago brethren that a gross Of loo
per cent. added TO the cost OF food
items is sufficient to cover overhead
expenses, waste in cooking, cost Of ser
vice and still leave a reasonable profit
for the purveyor.
Announcement was made a few days
ago that the restaurant men OF Chicago
and representatives of the City coun-
clPs committee on the high cost Of liv-
ing had come to an understanding that
an average OF 100 per cent. added 70
the cost of foodstuffs was enough e
yield fair profit. Investigation had
shown that In some cases the restau-
rants had been charging as much as 500
per cent. above the present wholesale
cost OF food.
An investigation by THE NEW YORK
HERALD among leading restaurant men
OF the city representing the catering
needs of about 60 per cent OF the eat
ing public showed that the New York
restaurant men would be glad 10 be as
sured OF gross revenue that would
represent double the cost OF 6he food
they serve. They maintain tha4 would
be sufficient TO provide a reasonable
profit. But they also maintain that
they do not and cannot get IL.
In some restaurants there has been
an average reduction in prices OF about
20 per cent. since last September But
despite this reduction there Is a failing
off in the number OF patrons that
amounts to approximately 40 per cent
The principal commodities which have
made possible a decline in restaurant
prices in the last six months are butter,
eggs. vegetables. pastry, sugar and
canned goods. Meats and fish have been
down. but are on the rise again.
1t is the intention of the New York
restaurant men to maintain an average
reduction of about 20 per cent as long
as IL is possible TO do so. They explain.
however, that they are confronted with
numerous difficulties and that these
three important elements enter into the
problem.
First, the labor situation. dish
washer who three years ago would be
glad to work for 50 q week and meals
now demands and gets from $40 TO s23
and meals. This situation is adjusting
itself gradually, but only through re-
placements.
complain, are so organized TO protect
Z
prices as to make il difficult to do busi
ness with them to advantage. The COM
plant is that a certain class of whole
sale dealers get together and squeeze
the restaurant men as much as possible
! just as soon as he becomes obligated to
the ring for his supplies.
| Third the lack of anything approach
ing equal organization among the ca
terers to protect their own interests.
The belief was expressed that had il
not been for the organization last Sep
tenber OF the Standard Purveyors. an
organization of about sixty prominent
restaurant men for cooperative purchas-
ing. the reduction that is boasted OF
could not be maintained. The organiza-
ton has acquired premises In West Six
! teenth street. where fifty OF sixty freight
cars may be accommodated allowing
members to take advantage Of quantity
prices on such staples as potatoes. &c.
They say that the cost OF distribution
is not enough to overcome the advan-
tages derived through this method OF re-
ceiving supplies.
Probably so per cent Of the vegeta-
bles used in New York city restaurants
| the year round are canned products. The
reduction i'm, these and IN butter and
eggs has been an important factor es-
tabiishing the present scale OF prices.
But II Is a question, the puiveyors say,
how long this scale Will continue. A
steak weighing q pound for $1.35. or
pork or lamb chops at 90 cents. they
say. is fair and yields fair margin
OF profit.
But the restaurant men are up in arms
against what they term an unwaTranted
increase In the price of gas for cooking
purposes. This has increased from so
cents to S1.20. and now TO $1.5o, or ali
increase OF nearly 100 per cent. on the
cost a year ago. Fully 30 per cent.
OF the restaurants OF New York city
use gas for cooking purposes. They
now are considering the substitution OF
charcoal broilers and coal ranges. which
they say can be made to pay for them
selves in three months on the basis Of
the present increased gas rates
These arguments offered by the res
taurant men in justification Of existing
prices in the better class restaurants
do not take into consideration the main
tenance or cabarets. That Is another
affair. they maintain. II q person wants
10 eat IN a cabaret he must consider
tho menu charges in relation to the quail
ity OF the entertainment
The action of the Chicago restaurant
men has been OF great interest to the
New York trade but the probability
of any similar action by the local ca
terers seems remote. They agree that
an average OF 100 per cent cent gross
I increase over cost would be highly sat
| isfactory. They agree even that In many
| cases a lesser advance would be SUM-
| cient.
The chain restaurants have not as a
general thing made the reduction OF 20