How Two Denver Restaurants are Fighting Inflation

You’ve probably noticed your weekly grocery bill has been climbing (and climbing and climbing). That’s because food prices rose more than 11 percent in August over the previous year, which was the highest 12-month increase since 1979. Restaurants are experiencing those same price swells, which is why your pizzas and burritos also probably cost a little more lately.

“It’s agonizing for us; it’s not easy for us to raise prices,” says Rachel Wells, owner of Santiago’s Mexican Restaurants, which has nearly 30 Front Range locations. “We don’t want to outprice anybody. We want people to be able to come to our restaurant two or three times a week and be able to afford it. When we raise our prices, it’s very hard. It’s very personal to us because our customers are our family.”

After a couple years of rising ingredient costs—as well as paying higher wages, insurance premiums, and rent—Wells made the difficult decision to raise the price of Santiago’s iconic breakfast burritos, which cost $2.55 in 2020 and now ring in at $2.81. The increase doesn’t fully cover the higher ingredient expenses they’re paying, and if prices of inputs like eggs and potatoes continue to skyrocket, she may have to hike up menu prices again.

Percentage of Price Increase per Item, 2021–2022*:

• Eggs, per case: 56 percent
• Potatoes, per case: 22 percent
• Cheese, per pound: 17 percent
• Tortillas, per case: 19 percent
• Flour (bag): 23 percent
• Whole peeled tomatoes (case): 36 percent
• Lard (box): 17 percent
• Mild chiles, per case: 7 percent

*Data provided by Santiago’s Mexican Restaurants

Raising menu prices is one way that restaurants are trying to combat this historic inflation, as are the dreaded “shrinkflation” (cutting portion sizes) and “skimpflation” (swapping in lower-cost ingredients).

At Sullivan Scrap Kitchen in City Park West, chef-owner Terence Rogers is shifting the menu a bit, something that’s easier to do at a seasonal restaurant than, say, a fast-casual burrito joint whose green chile is emblematic of the city itself. Sullivan Scrap Kitchen’s diners expect some staples—the burger is always in the lineup—but they look forward to rotating specials as well.

“Our philosophy of changing things week to week was pushed by increased prices,” Rogers says. “By being a little more flexible with the menu, we can lean more on our staff to be creative and come up with great things based on what’s around. We’re flexible to rely on our culinary strengths rather than specific items.”

With protein prices especially zooming upward, Rogers has focused more on vegetables such as the tempura squash blossoms that were a hit this summer and the foraged mushroom risotto for fall. “We were more protein-based, and now we’re trying to do more vegetarian stuff, just honestly to combat the costs we saw,” Rogers says. “Turkey has gone up, bacon, many proteins have gone up. The margins are already razor-thin, and even a small amount of inflation [affects restaurants].”

At Santiago’s, Wells had to skip their annual breakfast burrito day in October, when the eatery sells burritos at crazy-low throwback prices because it would have cost too much this year. She says most customers have been understanding about changes like that and the price increases, but that they’ve received backlash from some patrons.

“Believe us, it’s not easy for us to raise prices,” she says. “My mom [Santiago’s founder Carmen Morales], her very first customer when she opened in 1991 still comes to the restaurant. That means something. We really want our customers to be able to afford Santiago’s, but all the costs, they keep adding up.”