Ok. Let me give another business owners perspective. I own a couple of restaurants and am in there everyday cooking and running the show. For the past 4 years I didn't raise prices. Especially once the economy really started to tank in 09'. We wanted to keep prices down so that those who were having problems paying their mortgage or maybe lost their jobs or people who were hurting at the pump could still come in the door and eat. The average ticket price was roughly $7.50 I guess(my math could be off right now). We absorbed ALL of the cost due to the economy. Gas prices went up and that effected us. Customers were not coming in as much. Even our vendors were charging us for their gas consumption to deliver. Next, food cost went up and that really hurt but still we stayed the same. EVERYTHING went up. Produce, Insurance, wood for my pits and basically anything under the moon went up. I still kept the prices the same. Well eventually I really started to feel it. I began to wonder if I was even going to make it through the winter last year. Banks won't help, I spent most of my savings to keep my customer coming back by not raising prices. I ABSORBED everything. I was in fear of pricing myself out of business.
We are one of the most successful and respected restaurants in my state. We have been in business since 1939. We had about 20 restaurants at one point and were going to franchise along side with McDonalds.
With that being said, success almost became failure FAST. I raised prices about 4 months ago. Roughly 10%. That is a big jump in my industry I know but I had to do what I had to do. Most people were paying only .50cents more for their lunch or dinner. My customers moaned and groaned to no end. The mayor of our city(Democrat) raised our taxes(in a terrible economy for his pet projects) through the roof and increased the food tax another 2%. My customers were mad at me because of it.
I had to raise my prices again 4 weeks ago because I am getting drilled by the rise in market(and inflation) but this time I only raised the prices 3%. It didn't help a whole lot to cover cost but if I raise them where I need them to be then I may as well go buy the nails for my coffin because people are holding onto every quarter. It's sad really.
Businesses around me are still more expensive but people do not care. They will moan and groan all day long. They come in and the average ticket will be around $9 with the same quality and portions. I don't get it. My competitors have cut quality, cut portions and have raised their prices higher than mine and I still get fussed at.
I had one gentleman literally scream at me in front of the entire restaurant because his lunch cost him .75cent more than what it did 4 years ago. I told him I am not raising the prices so I could stand their and be belittled by someone or to make my customers so angry to where they would never step foot in my door again. I had to do what I had to do.
Well the economy has managed to get worse(it's Bush's fault), food cost has gone up on me another 25%!!!!!!!!!!!!!!!!!!!!!, health insurance is killing me(actually may be the straw that broke the camels back) increasing 43%!!!!!! because insurance companies are being hurt by Obamacare so the private sector can not afford private insurance almost forcing us to cancel private group health care and seeking individual insurance. but guess what? We can not afford that either. Now I am forced to stay with my group health care plan and suck up the 43% increase. If I do not provide health care to my employees Obama will fine me even though I can not afford it.
the Bailouts are(were) a joke and banks won't even give big successful operations like mine a $25,000 loan to get through the winter months.
I have never had to go to a bank for a loan. Not even when I added a huge addition to my main restaurant or opened another. But now in this economic climate it is a different story.
There is A LOT More to the story but I just don't feel like getting into it.
So, after saying all of that, I can imagine why CRK raised prices. I don't like it myself but I am a reasonable person and I can sympathise with another private sector company. If we want to continue to buy CRK's for as long as they can produce them then we have to pay extra to make sure they are able to stay in business or that it is even worth their while. No one wants to bust their butts for free.
