We have raised our prices!
I know that statement doesn't ever put a smile on your face. No one is particularly happy when their favorite pair of sneakers costs more than they did last time; when the cable bill shows up $4 higher; or when the prices in the cereal aisle are all $.29 higher than your previous trip to the supermarket. As someone who has owned and worked with small businesses for 25 years I can tell you from firsthand experience that small business owners are almost always the last people to raise prices; often not doing so until long after their cost of doing business increases, and their profits go down.
Over the past year I have noticed very few mobile food vendors raise their prices while, at the same time, operators have absorbed significant increases in the cost of the ingredients. As an example: the prices that small business owners are paying for beef and cheese are up 15% from this time last year while some pork prices are up 21% (source). The price of coffee, vegetables, and wheat and other grain prices have increased as well.
With increases like this how come mobile food vendors have not raised prices already?
I think there are several fairly simple explanations for this phenomenon. Foremost, I think, small business owners are much more often in touch with their customers than mid or large size businesses. As a result, they know that they will have some interaction with them, in some fashion, directly about the increase. That's not always an easy spot to be in. Clearly, there is no anonymity to it. Additionally, we are at least sometimes a bit self-conscience about raising prices, wondering if they are justified (even when it clearly is). And lastly, there are concerns that even a small price increase will cause a loss of some customers.
The bottom line is really quite simple: if food vendors have not raised their prices this year their profits (or possibly the portion sizes) have gone down. Customers and clients understand incremental prices increases. They see it every day, almost everywhere.
It is, I believe, critically important to keep in mind that food trucks and mobile food vendors are small businesses. When profits go down it is not similar to a fortune 500 company that can absorb huge loses and still be stable and move on. Somebody may not get a bonus and stockholders may not receive as big a dividend. But, for most small business owners, profits equate to, and are, a paycheck! Losing 10% of a profit or a paycheck from one year to the next is a lot of money for most of us!
So, a slight increase in prices will help keep food trucks sustainable and on the road making their fresh and tasty food.
And, really who wouldn’t buy that $7.00 sandwich that used to be $6.50?