Surge pricing is expected to ~surge~ in the restaurant industry.
You may have heard of—or even visited—Berliner Republik in Berlin, a pub boasting a “beer stock exchange” where the price of beer fluctuates based on demand. At this spot, the sky’s the limit for what you might pay to sip a popular brew during peak hours, making seats at the bar a must in the event a “stock market crash” tanks prices for a short period of time.
The German watering hole attracts tourists from all over the world—and, yet, its concept isn’t all that unique given more and more restaurants have adopted a dynamic pricing model as they contend with the elasticity of demand across the industry. Think of it like Uber surge pricing, but for food and drink—and chances are you’ve experienced it firsthand if you’ve ever been charged more for dinner at 7pm versus 5pm, or paid a fee just to secure a brunch reservation.
“I think restaurateurs are looking for ways to battle inflation,” says Trophy Brewing co-owner Chris Powers. Not to mention deal with labor shortages, supply chain issues—the list goes on… “The pros are you can steer customers to slower days, and you can make more money at busier times when your restaurant is in demand.”
The dynamic pricing model—which is expected to, well, surge in the coming years—has the potential to help restaurants thrive and maintain some control over their bottom line. “The purchasing aspect of the business we’re in right now is just so up in the air that it really does make sense to look to the future and see what kind of ways you can maximize revenue,” says Union Special owner/baker Andrew Ullom.
Though he’s quick to admit his own restaurant doesn’t have the capacity to set up dynamic pricing given its first-come, first-served system, “I think for restaurants on the reservation model and the dine-in model, it does make sense,” he shares. “At St. Roch or Crawford and Son, I think something like that could take hold. … It’s not a bad idea to take a stab at it.”
The flipside: For consumers already leery of surcharges and the feeling of getting nickeled and dimed to death, the demand-based concept may not take hold. “Guest perception could hurt business,” says Powers, “and dynamic pricing options are an add-on service with some POS.” Ullom notes previous attempts by some to add automatic gratuities or service fees onto tickets in Raleigh—“and that went over like a lead balloon,” he quips.
Ultimately, time will tell if—and when—the trend takes hold locally. As Ullom explains, “Raleigh’s market is still pretty tight-knit and still pretty small. I think everyone right now is doing everything we can to just get folks in the door.”
If it does gain traction, it’s crucial restaurants are upfront with customers about any changes in cost. “I have already heard of other places dipping their toes into it, and I haven’t heard many folks complain about it,” says Powers. “I think transparency of what is happening is very important and can help anyone considering dynamic pricing avoid angering any guests.” We’ll certainly prost to that.
The squeeze is real—but despite astronomical price increases, Raleigh remains one of the most affordable major metros in the U.S.
Feeling a war on your wallet? Who isn’t. If you can’t shake the feeling that “cash rules everything around me,” it’s because, well, it has been for a while now. But in a world where no matter how much you make, it has cost more to do (or have) less for a few years now, the good news is, your dollars go further in Raleigh.
But the squeeze is no doubt real. U.S. inflation peaked at 9.1% in its stratospheric ascent in June 2022, reaching the highest level since 1981—even outpacing wages from April 2021 through this spring—with no sector unaffected… and leaving us nowhere to hide (hey, skyrocketing home prices, utilities and dinner tabs). School meals soared a staggering 300+% over the previous year in January 2023, as housing, staples and everyday needs also spiked.
While we felt the heat turn up on burning budgets in Raleigh, turns out our fair city remains relatively affordable. Especially now, as inflation eases—holding steady at 3.7%—Raleighites are starting to feel relief at the pumps, the grocer and in a cooling housing market. In a side-by-side comparison to a handful of major U.S. metros, Raleigh proves why she is still the best place to live.
Raleigh on the Rise
Inflation is no joke—and spiraling costs in most sectors can make it feel like living in Raleigh is becoming unaffordable. While costs are no doubt rising across the board—with housing jumping ~$150K in the last four years alone—Raleigh remains a very affordable place to live across all categories in a cost-of-living comparison. In essence, “there’s a reason we consistently show up in those Best Places to Live lists, with a regional cost-of-living index below the national average,” per Work in the Triangle data. But seeing is believing. So we tapped Work in the Triangle’s super-cool online interactive tool that allows you to compare cost of living in a handful of metros known for migrating or serving as comparison to our City of Oaks.
How Cost of Living Stacks Up
Boston
Chicago
Philadelphia
Manhattan
Austin
$100K Annual Salary
Will go 34% further in the Triangle
Will go 15% further in the Triangle
Your salary will go just as far
Will go 57% further in the Triangle
Your salary will go just as far
Groceries
13% less in the Triangle
10% less in the Triangle
14% less in the Triangle
22% less in the Triangle
Cost about the same
Housing
55% less in the Triangle
32% less in the Triangle
Cost about the same
80% less in the Triangle
13% less in the Triangle
Avg. Home Price
$935,580
$550,943
$437,562
$2,559,715
$506,117
Avg. Apartment Rent
$3,826
$2,944
$1,594
$4,773
$1,843
Utilities
20% less in the Triangle
9% more in the Triangle
7% less in the Triangle
Cost about the same
9% more in the Triangle
Transportation
26% less in the Triangle
18% less in the Triangle
12% less in the Triangle
18% less in the Triangle
6% more in the Triangle
Health care
7% less in the Triangle
You won’t notice a difference
You may pay a bit more in the Triangle
You won’t notice a difference
You may pay a bit more in the Triangle
Misc. (salon, vet, movies)
20% less in the Triangle
Cost about the same
Cost about the same
27% less in the Triangle
Cost about the same
Raleigh vs. National Average
Avg. home price : $423,402 vs. $469,810
Avg. Apartment rent: $1,706 vs. $1,440
Gas: $3.81 vs. $3.80
Phone: $185.16 vs. $192.26
Total energy: $196.32 vs. $185.44
Doctor visit: $134.79vs. $129.92
Veterinarian Visit: $51.52 vs. $62.73
Housing and Living Numbers Breakdown
Population Growth: 529,550; 17% growth 2011–2021
⬆️ 3.8% South Atlantic region (eight states and DC) recorded the highest annual increase in consumer prices YoY as of end of September
$455K: 2023 Wake County median home price, ↓ $9,750 decrease over year prior
Food Finance
Remember when a carton of eggs outpaced a gallon of gas? And never mind what people will pay for Sriracha. But despite that behemoth bump, menu prices started outpacing supermarket staples this spring—and while both are trending downward, food away from home rose 6% year-over-year from September 2022 to 2023, compared to only 2.4% during the same time frame for groceries (the smallest 12-month gain since December 2021). Here in Raleigh, regional menu price growth also continued to slightly outpace national growth.
“Restaurant margins are much leaner than people believe,” says Amber Moshakos, president of LM Restaurants, who owns and operates such local gems as Vidrio, Taverna Agora, a’Verde and Carolina Ale House, and a scad of restaurants in Wilmington and Florida. “We focus on being efficient and smart in all areas of our business—from labor costs to costs of goods to overhead. We work on the controllables of the business. Utilities, paper goods, laundry and such are good ways we watch the overall business while not constantly adjusting price.”
As people start to pull back on dining out or make less expensive food choices, says Witek Marketing President Trish Witek, who works with numerous popular Triangle sup spots, restaurateurs “are aware of these cost thresholds and are doing everything they can to minimize menu increases. But at the same time, they have to pass on those continuously increasing costs to stay in business.”
While you may have seen price increases at some spots, other restaurateurs prefer to eat the costs instead of passing the burden to their patrons. “No restaurant can really raise prices to cover true costs of business,” maintains Moshakos. “We focus on hospitality and creating a great experience so guests will come back.”
One way she says LM offsets rising expenses is by actually increasing guest visits. “The main focus for us is to keep our quality standards high,” she says. “We cannot shortchange the guest experience.” That said, if increases are applied, restaurants will try to do so in the most guest-friendly way possible, like spreading the price increase in smaller increments across myriad menu sections so it is less impactful, she says.
“[People experience] sticker shock—but they don’t realize how much labor goes into the free chips and salsa you might expect on the table.” —Cheetie Kumar, Ajja
“Inflation impacts everybody,” Ajja owner Cheetie Kumar said in a recent Bloomberg interview. “We absorb all those costs, but we can only absorb so much because our margins are already so thin.” And while some item prices (like eggs) may be going back down, others are going up—so it’s always fluctuating, she says, noting that we’ll never see the prepandemic prices on staples like cooking oil again. And local restaurants are not in a position to negotiate pricing.
4 Most Common Staples Restaurants Order Most
Cooking oil: “Almost tripled in cost—the price is coming back down a little, but nowhere near where we used to be.”
Dairy (milk, butter, sour cream, etc.): “Dairy is still high and continues to fluctuate—at one point double market costs.”
French fries: “French fries remain high, as do eggs. … We don’t anticipate seeing a change in fry costs until the next crop.”
Eggs: “Eggs are also a staple. Last year was at the highest market due to bird flu. We have now seen egg prices come back down, but we aren’t back to original prices yet.”
“You can’t have a menu without these staples, so we have to sharpen our pencil on how to carry the costs without making unreasonable price increases. We can’t overprice ourselves.” —LM President Amber Moshakos
“Swipe life,” meet swipe fees. Using a credit card at restaurants and bars could cost you as service charges for credit-card use become common practice in cities like New York—and Raleigh isn’t far behind. Locally we’re seeing fees at places like The Piper’s Tavern (3.5%), Ladyfingers (3%) and Dram & Draught (2.5%), among others—with more considering the fee for 2024.
~$502 Million The staggering amount Mastercard and Visa plan to hike swiping fees on restaurants and other businesses over the coming months
While credit card fees already rank as the third highest cost for U.S. restaurants, some experts simply see it as the cost of doing business and maintain those processing fees should not be passed on to patrons. “Penalizing them for paying in a way you accept but do not prefer seems to me to be a very ungracious policy,” hospitality professor Jonathan Deutsch, PhD, told Restaurant Business.
Other insiders see the fees as a life vest for the industry. “Credit card companies continue to chip away at what has become a very narrow profit window for the hospitality industry,” says a local industry insider, bemoaning swiping fees as a last resort against slim margins and charges handed down by credit card companies. “We need to try to recoup fees where we can. So it’s not a matter of if, but when.”
“I say who, I say when, I say…” how much. Suddenly Julia Roberts’ dramatic 1990 outburst pushing against paying clients in Pretty Woman feels very relevant today for tipping. … “Tipflation” is a trending term this year, burning up the media circuit, social channels and brunch talk as we navigate the changing rules for tipping and tipping fatigue in the wake of pressure to tip on, well, everything. The takeaway? While some local businesses like Layered Croissanterie require a tip to order—in this case, online—arguably the best part about tipping is the choice. In our chat with a cadre of Raleigh cafe, bar and restaurant owners this year, 20% remained the average suggestion for tipping on bites and beverages, with 30% encouraged for exceptional service.
What Raleighites Make & Do for a Living
Got talent? In spades, actually. Raleigh ranks as the No. 1 place for business and careers for a reason. As one of the most highly sought-after cities in the country touting some of the most educated professionals, Raleigh is a dynamic economic hub with businesses stacking up among some of the world’s biggest. Driven by skyrocketing growth in population, a diverse pipeline of talent, outstanding quality of life and low business operating expenses, Raleigh rates as a top place for business with a slew of corporate headquarters, and technology and life science companies in the area.
10 Fastest-Growing Occupations Across Wake County
OCCUPATIONS HOURLY SALARY
Laborers and freight, stock, and material movers, hand $15.92
Software developers $62.46
Registered nurses $37.34
Home health and personal care aides $13.54
General and operations managers $51.00
Cooks, restaurant $15.30
Waiters and servers $11.05
Stockers and order fillers $14.95
Market research analysts and marketing specialists $33.72
Heavy and tractor-trailer truck drivers $22.88
MAJOR EMPLOYERS
Advance Auto Parts
Bandwidth
Gilead Life Sciences
Martin Marietta
Merz Therapeutics
Pendo
Red Hat
Wages
According to the Economic Policy Institute, in July 2022 at the peak of inflation, the federal minimum wage was worth less than any time since February 1956 when the federal minimum wage was 75 cents per hour—or $7.19 in June 2022 dollars. And July 2021 had marked the longest stretch of time without a federal minimum wage increase since Congress first established the wage in 1938.
30 States & DC Have Higher Than Federal Minimum Wage
$20 Minimum wage for fast-food workers in California— highest in U.S.
Life$tyle Look
How much it costs to live in Raleigh with a certain lifestyle
Do you ever look at a house or a car or a grocery cart and wonder how much it costs to live that way? Who doesn’t. While everyone’s lifestyle is unique, we took a snapshot of a half-dozen-ish real-life Raleighites to see how much they spend monthly to maintain it.
North Raleigh Wellness Guru Monthly budget $3,000
27-year-old single post-grad rocking a job and a side hustle for extra $$, rents an apartment in central North Raleigh that has utilities and internet bundled in rent, and would rather eat ramen than give up the gym membership, but shops to survive at Harris Teeter and eats out twice a week. Drives a paid-off old Prius and travels quarterly on the cheap, and—the linchpin here—charges everything on their credit card and never pays it off in full to keep up the lifestyle.
53-year-old marrieds-with-no-children living in a four-bedroom paid-off home in Central Raleigh with one paid-off car that rolls out only when necessary. They prefer walking and biking everywhere, keep a beautiful lawn, shop at Walmart, travel and eat out infrequently—but always budget tea at Ladyfingers—and are wealthy on account of spending only what is necessary.
Midtown Marrieds Monthly budget $8,500
47-year-old married mother of two public school-attending tweens living in a 3-BR dual-income home in Midtown who lives for lattes and leg day at the gym, shops at Wegmans and Target, drives a Volvo and rocks two car payments (her husband has an Audi), travels three times a year, orders in twice per week, and goes out to eat ~once per month.
Downtown Dude Monthly budget $4,700
40-year-old single professional living in a 1-BR high-rise in DTR, who loves shopping and live music, eats out most of the time, scores pantry staples at Publix (but who needs groceries?), and travels quarterly.
West Raleigh Dog Mom Monthly budget $6,300
45-year-old single professional living in a 3-BR townhome in West Raleigh with a fur child and an Acura SUV on lease who spends more than she should on Amazon, happy hours and the veterinarian, scores fresh produce from Hungry Harvest and pantry staples from Target and Food Lion, orders in and eats out ~twice per week, and plans more trips than she actually takes.
Budding Brood Monthly budget $9,325
34-year-old married real estate agent, mother of three tots under the age of 5, living in a three-bedroom two-income single-family home in Northeast Raleigh, who spends her budget on Costco groceries, childcare and gas toting the family team back and forth to daycare, Saturday soccer, and activities with friends in their Honda Odyssey and Toyota Camry. Eats more McDonald’s than she cares to mention, dreams of date night and one day traveling again.
North Raleigh Near Empty-Nesters Monthly budget $9,550
62-year-old New York transplant near-empty-nesters with one kid in college and one nearing graduation, with one stable income and an affinity for New York prices. They spend their money on tuition, plenty of auto expenses, lawn care and takeout, shop at Publix and travel monthly (mostly to see their child).
Shutterstock; Sources: U.S. Bureau of Labor Statistics; Work in the Triangle; Wake County Register of Deeds, U.S. Census Bureau, EMSI estimates; US. Census Bureau, ESRi forecasts; Raleigh – (LAUS) – Dec. 2027; Redfin; EPI. All data as of press time
