El Paso restaurant owners feel ripple effects as rising gas prices drive up costs

EL PASO, TEXAS (KFOX14/CBS4) — Rising gas prices are rippling through the economy in El Paso, where restaurant owners say they are paying more for ingredients, deliveries, and even everyday services their businesses rely on.

Gelaine Apuan, the owner and operator of Mac’s restaurant in downtown El Paso, said the increases are making it harder to keep dining out affordable for customers.

“It’s quite challenging because I’m trying to keep it so that people can still go out, and people want to go out to eat. And it’s just it’s disheartening to see what’s going on right now with gas prices especially,” Apuan said.

Some of the higher costs are being driven in part by tensions overseas affecting the Strait of Hormuz, a major global shipping route. About 20 percent of the world’s oil supply passes through the area, and when supply is disrupted, energy costs can rise.

Kelsey Erickson Streufert with the Texas Restaurant Association said restaurants felt the impact quickly.

“Restaurants saw the impact of rising gas prices pretty immediately,” Streufert said.

Jordan Salas reports on El Paso restaurant owners feel ripple effects as rising gas prices drive up costs (Credit: KFOX14)

Apuan said some price increases have been significant.

“The cost is probably about 25% more than where we normally are. And produce, oh my goodness. We just bought a box of limes this morning, where we normally pay $25…. it’s up to 68,” Apuan said.

She said the higher energy costs are also showing up in services beyond food. Apuan said linen supply companies are adding energy surcharges. In a notice sent to Mac’s, one company said, “Due to recent geopolitical developments, our energy costs have increased approximately 20 percent,” and it is adding a temporary surcharge to accounts.

Industry leaders say higher fuel costs are driving up the price of getting food to restaurants, with additional fees appearing on bills.

“So immediately, everything coming into a restaurant costs more. In fact, we’re even seeing fuel surcharges get added to a lot of bills for restaurants,” Streufert said.

Apuan said the rising costs may also be affecting customer traffic.

“My weekends that are normally astronomical… have been definitely decreasing,” she said.

Streufert said the trend is being seen nationwide as consumers adjust their spending when gas prices rise.

“About 90% of American consumers adjust their spending when they’re dealing with rising gas prices. So that hits us on both sides of the equation, making those profit margins even narrower, which is a challenge for a lot of our local restaurants,” Streufert said.

Even with costs rising, Apuan said Mac’s is not raising menu prices yet.

“We have not made any changes at this time because I want people to still be able to come out, still be able to afford, still be able to bring their families out,” she said.

“Our biggest challenge is that we don’t raise prices. That is going to be our biggest challenge. But we will not skimp on lesser quality of food,” Apuan said.

Industry leaders said if high prices continue, customers could eventually see the increases reflected on menus.

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