“Instead of the tacos, I’m going to charge for the lemons,” laughs Consuelo Lara, who is in charge of collecting the orders from the diners of the suadero, head and campechanos tacos that she sells at the El Parral taqueria, which her Dad opened about 50 years ago, in the San Simón Tolnahuac neighborhood, in Mexico City.
“La güera”, as the clients of the little metal shop that does not exceed four meters call her, says that since last year she has faced a constant rise in the price of a box of lemons, which contains 20 kilos, and that 300 pesos it rose to 1,400 pesos during the first weeks of 2022. Just when inflation remained at 7%, one of the highest in the last decade.
In January, annual headline inflation stood at 7.07%, below the 7.36% of December last year, accumulating two consecutive months of decline but still above Banxico’s target of 3%.
The local ‘la güera’ has not raised the price of tacos, which range from 12 to 24 pesos, depending on the meat of the taco, and for now they do not expect to do so, unless there is an increase in the price of the tortilla. Until now, the small business has absorbed the cost of the lemons and also the beef, which has had less of an impact, but also eats into the taqueria’s profits.
According to Inegi data, in January, the lemon had a rise of 66.7%. In the first days of February, the price of lemons in the Central de Abastos has stabilized, but it is also due to the fact that producers do not let them ripen and sell them in a smaller size, which usually helps to make more product available and abrupt price increases are avoided, says Lara.
At Click Abasto, the online store where some Central de Abastos tenants sell their products, a 15-kilogram sack of sour lemon is sold for 430 pesos, and a seedless lemon for 500 pesos.
But the lemon is not the only input that has suffered the blows of inflation. Beef increased 1.98% in January, while chicken also increased 4.44%. And the restaurateurs continue to hold on.
“I can’t raise the price of the menu. If I raise the meals I don’t sell: here we all have almost the same price if I give it more expensive I lose due to competition,” says Ángeles Rodríguez, cook and manager of a cheap kitchen in the San Joaquín market, in the Peralvillo neighborhood, who has suffered in to a greater extent the increase in the kilo of chicken, which it acquires in the same market.
Rodríguez says that chicken is one of the products that he cooks the most in his stews, and to lessen the impact on profits of ‘El sazón de madre’, the name of his kitchen, he has chosen to use pork or make dishes in which chicken is usually more profitable, such as pancakes or rajas with cream.
Another of the movements to cushion the cost of some supplies, such as chicken breast, which in the market has a price of 110 per kilogram, has been to separate the menus, and put “à la carte” the stews that have breaded breast or milanesas de res, and price them higher than the meal, which costs 60 pesos.
First it was Covid-19, now it’s inflation
Daniela Mijares, executive president of the National Chamber of the Restaurant and Seasoned Food Industry (CANIRAC), comments that the simplest way for players in the industry to lessen the impact of rising prices is to transfer the cost to final consumers. A complicated maneuver just at a time when they are trying to attract back customers who remained confined during 2020 and the first months of 2021.
With the return of diners, who after two years of the pandemic have managed to regain confidence in going to restaurants, small restaurateurs are trying to absorb the inflationary impact, seeking that consumers do not give up eating out.
“We are doing everything possible so that inflation does not pass through directly and does not affect the final consumer. The client is returning to our tables and the last thing we want is for them to feel that the cost has been passed on to them, although for us it definitely represents a significant challenge,” he adds.
Irving Ramos, owner of the “Astroboy” restaurant bar, located in Tlalnepantla, in the State of Mexico, is one of the restaurateurs who have so far absorbed the impact. After being closed for several months, and then only operating as a restaurant, wings and boneless sales had been one of the channels that allowed sales to be maintained.
In his business, the star products are hamburgers and wings, but the rise in chicken and beef prices has meant a challenge to keep prices where they are.
“The start of the year has been complicated, in addition to the fourth wave of COVID-19, we had the cost of January and inflation. We have been launching promotions and risking profits a bit in order to maintain sales that allow us to stay afloat and that those of us who are here can continue to have work and income”, he declares. But the microentrepreneur already sees an adjustment in prices as inevitable. “We will do it in a creative way (compensating the increase with the portions) so that the customer feels the least possible impact on his pocket,” he concludes.
