Colorado Restaurants Implement Surcharge To Help Recover Losses During Pandemic

(CBS4) -- Everyone is having a tough time making ends meet these days, and we're starting to see the impact when we go out to eat. You may have noticed some restaurants have a new fee on your bill. These 4% surcharges are a way to help some restaurants get back on track after pandemic impacts.

According to the Colorado Restaurant Association, Colorado restaurants have lost $3 billion in revenue since the pandemic began, and it will take years to recover those losses.

Restaurant owners in our state owe an average of $180,000 in pandemic-related debt. Also, wages for restaurant workers are up 20% since 2020. So this is one of the reasons why 9 of 10 restaurants in our state have raised menu prices.

The surcharge is a way not only to offset the increased costs of operation and food costs, but to also offset pay disparities between cooks, bartenders and servers.

"If you put a service charge on your bill or if you stop accepting tips altogether and just accept, you know, an 18% service charge or 20% service charge, then, the operator can distribute that money," said Denis Mickelson with CRA. "It could go to staff benefits and equalizing that pay disparity."

Rising food costs have also contributed to this new surcharge. Nationally, wholesale food prices have increased more than 17% in the last 12 months, which is the largest increase in almost 50 years. Butter is up 67%. Oils are up 46%, and flour is up 37%. But the biggest change in price is in fresh vegetables, which are up 99.5% in the last 12 months.

This affects food distributors as well. Food supplier Eddie DeBartolo is working with his client BeauJo's Pizza to make sure they stay in business.

"We all are faced with pricing inflation," DeBartolo explained. "We all are faced with labor challenges. All of us are in the same boat. It's my job to make sure to minimize as much as possible for our customers like a BeauJo's."

Staying in business has also become more difficult. CRA says thousand of restaurants have closed locally and over 90,000 have closed nationally.

"We're just trying to not overcharge the guests and just do enough to help get our margins in line," said Brian Glazer, the food and beverage director of Beau Joe's Pizza.