California restaurant owner says tariffs, inflation leave him “barely breaking even”

Inglewood, California — One family’s legacy, an Italian restaurant called Sunday Gravy that’s been operating for decades, is now “barely breaking even,” owner Sol Bashirian says, as tariffs and inflation are eating into its profits.

“It’s just the reality of where the food industry is at,” Bashirian told CBS News, noting he’s spending thousands of dollars more each month on imported ingredients.

His family has been in business in Inglewood, California, just south of Los Angeles, for decades, and has seen a 30% bump in sales since last year. But the family’s legacy could go stale.

“My dad put an offer together, and grabbed all his savings and bought this place. And here we are now, almost 50 years later,” Bashirian said.

Financial analyst R.J. Hottovy with Placer.ai — a real estate software company that advises restaurants across the U.S. — says eateries that cater to lower- and middle-income consumers are hurting financially, and so are their customers.

“That group is facing cost pressures on a number of fronts, not just food, but other things like rent and inflation,” Hottovy said.

A report released earlier this month by the cloud-based management company Toast shows that 48% of the restaurants surveyed plan to raise menu prices if costs continue to rise. 

The National Restaurant Association says menu prices would need to increase by 30.3% just to maintain a thin profit margin of 5% under the current economic conditions.

“It sounds easy, but there is a process behind it,” Bashirian said. “It’s reprinting a menu, and the printing costs associated with that.”

Bashirian says the sticker shock of a price hike could “absolutely” drive away customers from even coming to the restaurant.

“It’s pasta, and pasta is not supposed to be crazy expensive,” Bashirian said.

For now, Sunday Gravy is adding a 5% surcharge on the bill to offset tariffs. Under California law, restaurant owners are allowed to add an extra fee if it’s “clearly and conspicuously displayed” on menus.

“There is price fatigue,” Hottovy said. “I think consumers have been paying higher prices for many years. And there is a breaking point for a lot of these consumers.”

The National Restaurant Association is pushing for imported food and beverages to be exempt from the Trump administration’s tariffs, arguing that hikes could cost the industry billions this year alone.

“It would allow us to at least have an attempt at a fighting chance, and flourishing and continuing on,” Bashirian said of the possibility of receiving relief from tariffs.