If you want to upset Donna Chevrier, an Ottawa restaurant-industry veteran who these days is the queen of the city’s gourmet tacos, tell her that the food at Ola Cocina, her cosy Vanier eatery, is overpriced.

“I have been at this for 35 years. I have seen a lot and been through a lot,” Chevrier says. “Yet still, every time someone writes a bad review and includes the line ‘it was expensive,’ it is gut-wrenching and hard to take.”

Distroscale

As if on cue, just as Chevrier was interviewed this summer, a Google review for Ola Cocina appeared. It read: “two stars — overpriced.”

Chevrier asks: “How would that make you feel after working 12 hours a day, and putting your heart and wallet on the line?

“Perhaps if customers really understood how that plate ended up on their table … but nobody cares, nobody wants to hear complaining,” she continues.

“The only place to make cuts or be profitable is labour and food costs. So which do you sacrifice?” Chevrier asks. “Less staff and make people wait for their food? Or deep-fry everything and lose your customers because your food sucks?

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“So we keep striving for perfection, while trying to save money every which way we can in order to survive.”

Chevrier raised her prices this year. Tacos that were $4.50 a year ago now cost $5.50. The reason? A ballooning payroll for the not-yet-five-year-old business that employs 15. “Labour should be around 30 per cent (of a restaurant’s budget). However, mine is up at 38 to 40,” Chevrier says.

“I know I am not alone on these numbers, because I have asked my colleagues,” she adds.

Indeed, Ola Cocina seems to be just one of many Ottawa restaurants that have strikingly increased their prices. An analysis by this newspaper of older and current menus posted on Yelp — the crowdsourced review forum — and restaurant websites found unusual price hikes in the past year, a phenomenon that restaurateurs say is tied not just to this year’s increased minimum wage in Ontario but also to rising food costs, rents, insurance fees, property taxes and more. All of these need to be offset rather than swallowed, they say.

Photo by Wayne Cuddington / Postmedia

For example, downtown at Fauna and Riviera, oysters that were $18 last fall are now $20. During the same time, Riviera’s seafood chowder jumped from $20 to $22. At Play Food & Wine in the ByWard Market, the long-standing bargain of two small plates for $22 at lunch rose this year to $25. A year ago, a charcuterie plate at Play cost $21. Now, it’s $24.

From last September to this summer, the beef tartare at Town on Elgin Street increased in price from $16 to $18. Down the street at Datsun, from November last year to this summer, bao buns jumped from $6 to $6.50, dumplings went from $10 to $11 and dandan noodles climbed from $11 to 13.50.

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Numbers like these, especially dish after dish, can make dinners out in Ottawa seem like markedly more hefty expenditures than they were months ago. Some muse these increases might even be larger than price hikes elsewhere in Ontario or Canada. But at what point do price hikes morph from necessary evils that keep restaurants afloat into deterrents that turn away too many prospective diners?

As all costs do, menu prices inflate over time. But historically, menu inflation has averaged 2.5 per cent per year over the last 20 years, says Restaurants Canada, the national non-profit organization. The increases above, such as the portions of lobster pasta at Riviera that last fall were $30 or $55, and have jumped to $33 and $60 respectively, are closer to 10 per cent.

Price hikes at Ontario restaurants were widely expected in response to the increased minimum wage that Ontario’s then-Liberal government introduced in January 2018. But the above increases are more steep than what some industry watchers predicted.

Late last year, Restaurants Canada predicted a four per cent rise in Ontario’s 2018 menu prices. The university researchers responsible for Canada’s Food Price Report 2018 forecasted a four to six per cent increase in Canadian restaurant prices this year, roughly in line with the rising cost of vegetables in grocery stores.

Ottawa restaurateurs speak of price increases as a requirement to survive in a business with the slimmest of profit margins.

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“Really, the consumer has no idea,” says Richard Valente, the self-described “old-timer” restaurateur who runs the Italian restaurant Fratelli Kanata. If consumers were to see the payroll costs of a leading Ottawa restaurant, “they would drop on the floor and say that’s impossible,” Valente says.

Valente himself notes that the difference in price between similar dishes in Ottawa and Montreal can be staggering. He recently had an $11 margherita pizza in Montreal — while one at his restaurant is $16. But in Montreal, the chefs and servers would be making several dollars less an hour, the restaurant’s food costs could be less, and the rent would be cheaper, Valente explains.

Frequent restaurant-goer Pej Vong says price increases have made him cut back this year on dining out and also re-think where he chooses to eat.

“I used to dine out two to three times a week. Now I dine out twice a week or less or sometimes not at all,” says Vong.

“My dining choices have definitely changed,” he adds. Vong says he’s on the lookout for “better value … for quality eating and bang for your buck. I’m more focused on a real meal with decent, nutritious ingredients and less pretentious food options.”

Vong, an aviation industry systems analyst, as well as an investor and landlord, travels frequently and adds that restaurants with prices rising higher than the rate of inflation are even more noticeable in Ottawa than in Toronto or Montreal.

“I think it’s a combination of factors: higher operating costs in Ottawa, less competition, significantly higher property taxes in Ottawa versus Toronto and most certainly Quebec and Montreal, higher business costs — local licences and fees — many of these factor into higher rent,” Vong says.

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Restaurateurs and chefs stress they aren’t getting rich from price hikes — that is, if they’re willing to discuss the topic. Of roughly 30 people approached by this newspaper with questions about prices on menus, fewer than 10 replied. But those who did reply had much to say, reflecting perspectives from different parts of the city and corners of the industry.

Fratelli’s Valente says he looks to premium casual chain restaurants such as Milestones or Joey to figure out price points and sets his prices accordingly. And yet, the chains can lower their costs by buying ingredients in greater volume and at greater discounts, Valente says.

Being an independent restaurateur is still viable, he says. But they days of “30-30-30-10” — meaning budgeting 30 per cent of revenues on labour, food and rent respectively and keeping 10 per cent as profit — are gone. “You have to stay on top of every percentage point,” Valente says.

Given rising and unpredictable food costs, Valente says that if he were starting out now, he’s stick to serving just pizza and pasta, and skip plates laden with veal, lamb and other meats. “Those protein costs are just crazy,” he says.

Photo by Jean Levac / Postmedia News

James Bratsberg, chef at MeNa, a fine-dining destination on Preston Street, says that in addition to rising wages, price increases at his restaurant reflect a commitment to quality ingredients, quality cooking and good working conditions.

“The restaurants that you see not raising their prices, especially right after the minimum wage increase, are probably something to worry about,” Bratsberg suggests. “Where are they buying their food from? What’s the quality of the food like now?

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He continues: “How well are they treating their employees? Did they just take four full-time employees and put them onto part-time hours to try and control more costs? Or are they asking their employees to do even more work, while removing a whole position or two from the kitchen?

“I’m sure many kitchens went from having a full-time dishwasher to the cooks doing dishes every day but Friday and Saturday.

“The price of doing business went up. Thus, we should raise our prices. Just like every other industry,” Bratsberg says. “The only way to really change this would be to lower quality, which for a restaurant like ours is not an option.”

At MeNa, the five-course tasting menu is $115, up from $95 a year ago. The seven-course tasting menu is $140, up from $130 a year ago. The nine-course tasting menu is $165, up from $145 a year ago.

But restaurants that have lowered their prices do exist.

Jamil Bhuya, the CEO and founder of Ottawa’s two Burgers n’ Fries Forever locations, cut prices at his eateries by between five and 10 per cent this month.

Bhuya said that in recent months, his business is passing on savings to customers after cutting costs by reducing operating hours, switching over to grinding its meat in-house and eliminating menu items that weren’t selling. Bhuya also found a new meat supplier that gave him a better deal because BFF is opening a location in Toronto and can buy in greater volume.

“We’re not going to hoard all the profits,” said Bhuya, who added that when he had previously raised prices, he saw a drop in customers.

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Photo by Jean Levac / Postmedia News

In Stittsville, Michael Blackie, the veteran Ottawa chef and co-founder of NeXT, has radically dropped many prices — and portion sizes — this month, so that no dish at his fine-dining destination is now over $20. The $38 12-ounce ribeye steak has been replaced by a $19, four-ounce ribeye. A $24 dish that included seven prawns is now a $17, five-prawn dish. The $29, four-scallop dish is now an $18, two-scallop dish.

Blackie says that this summer, he visited a large restaurant in Charlotte, North Carolina, which was packed with customers chowing down on smaller, less expensive plates, and its success prompted him to drastically re-think his prices.

Many in the hospitality field are focused on boosting the average amount each customer pays, Blackie says. “Can we get it $42? Can we get it to $52?”

“The business is no longer about average cheque (per customer),” Blackie contends. “It’s all about volume, as I clearly saw. Do I want you to come to my restaurant twice a year or for special occasions, or do I want you to come over (more often), and say, not only is it amazing food, but it’s reasonable, the pricing is reasonable?”

He adds that in the last year, NeXT, which is five years old, saw a 20 per cent drop in its restaurant revenues. “People are not spending the way they used to.”

Blackie says NeXT remains profitable because it also has an event space, for which business has been steady. “I honestly feel any standalone dining room that doesn’t cater to events is doomed to fail. We hear about those places monthly,” he says.

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Last month saw the closure of the well-regarded chef-run Ottawa restaurants Pomeroy House in the Glebe and Beechwood Gastropub in New Edinburgh.

But then, there are the long-standing survivors on Ottawa’s restaurant scene, such as Chahaya Malaysia, which has been in business since 1985.

Photo by Wayne Cuddington / Postmedia

The Montreal Road restaurant’s co-owner Margaret Abdullah says that faced with an “avalanche” of increased costs, from food to labour to insurance, Chahaya Malaysia raised its prices by roughly 10 per cent two years ago, about three years after its previous increase.

“We also adjusted the portions of the shrimp rolls, the satay, and the shrimp so that the increase would be less painful,” Abdullah says. Appetizers now feed two guests, she adds.

But she continues: “I have no problem with passing increased costs to my customers. In my opinion, anything else is a stopgap for a situation that will not improve.

“Unfortunately, folks seem to have been hoodwinked by the big guys — Walmart, Visa, etc. — into assuming that discounts and rewards are how business is done. They really believe that they are entitled. Any discount or refund that is provided, however, ends up as a cost on my plate. If the buck stops here, I eventually go under. So I pass these and all other costs that we incur on to the customer.

“Many are satisfied with the value for their money, and some complain. I apologize,” Abdullah says.

“If my business is viable, if my product is good enough and if my customers are intelligent and generous enough, we survive.”