Posted on Sep 23, 2022

The last time Adele Ibrahim made a trip to his local Costco to stock up for his breakfast food truck on 57th Street and Lexington Avenue in midtown Manhattan, he went home emptyhanded. Over seven years in business, he’s never seen his costs this high. 

"I'm thinking about raising prices from the beginning of the year," Ibrahim said. "At least a quarter more for everything."

As one of more than 10,000 street vendors in New York City, Ibrahim is no stranger to competition, but the double hit of inflation and fewer office workers has been especially difficult for food trucks. Offices in the New York metro area were at about 35% occupancy in August, according to card-swipe data from Kastle Systems, the labor market is tight, gas prices are climbing, and US food costs are up 10.9% from a year ago, the biggest increase since 1979, Labor Department data released last month showed. 

Food truck owners, known for affordability and convenience, have less wiggle room than restaurants or retailers when it comes to hiking prices. They are trying to stay afloat by finding cheaper sources of raw materials, looking for new locations or turning to catering, a trend that began during the pandemic, when events were held outdoors. The New York Food Truck Association (NYFTA), a group that represents gourmet food truck rentals in NYC, connects many of their members with catering gigs, particularly those who have no prior large-scale event experience.

"Last year we probably did 500 events," Ben Goldberg, president of NYFTA said. "This year, we're on track for a thousand. Some of our trucks now make as much as 75% of their revenue off events and projects." But even there, inflation is pinching. Prices of all the materials vendors use are significantly up, Goldberg said.

And not all food trucks who have ramped up on catering gigs believe they are the solution. "In order for me to get to a location, it's costly," said Nicko Karagiorgos, the owner of Greek food truck Uncle Gussy's on 51st Street and Park Avenue. "In order for me to use propane, it's costly. Labor is also costly, because now I'm paying people overtime.”

The Russian Impact

Since 2007, 1,350 food truck permits have been approved across the city, with hundreds of hopefuls still on the closed waitlist. Most approved vendors are renewing their permits, according to a city official who declined to be named for privacy reasons. But the appeal of running such a venture is fading.

Food prices have risen globally since Russia’s invasion of Ukraine slowed grain shipments from one of the world’s top suppliers. Several essentials, like frozen vegetables and certain dairy products, are seeing record year-over-year rises.

Magnus McKellar, who operates a Jamaican food truck called Jamrock Jerk in Midtown East, said people react more negatively when food trucks raise prices than when traditional restaurants do. He’s been buying items like peas in bulk to reduce costs, and going directly to suppliers.

“One of the major impacts is not being able to raise prices” in line with broader economic conditions, McKellar said. “There’s only so much that I can go before people start to revolt.”

Mohamed Youssef, a food truck operator at Columbus Circle, said he had to raise prices 15% to 20%, however, he can’t increase them anymore as customers will leave for alternate dining options. "Most customers prefer to eat McDonald's, instead of paying more money for real food.”

Unlike consumers, most food trucks don't buy their supplies directly from grocery stores. They source products from places like Restaurant Depot, a bulk food and supply store known for its cheap goods with more than 130 locations across the country. However, even these retailers, similar to Costco Wholesale Corp., are failing to live up to their low-cost reputations. The price of a 40-pack of Kirkland bottled water at Costco rose from $1.89 last year to over $4 in May.

While Ibrahim has not yet made changes to his menu, some other food truck operators have. Karagiorgos, the owner of Gussy's, said he is unable to keep up with the soaring cost of lamb and beef in particular.

"We used to do lamb chops and skirt steak, but the price of beef and lamb is just way too high," Karagiorgos said. "I don't even know what I would charge for a skirt steak sandwich anymore."

Youssef also said he had to discontinue his lamb and beef kebabs, because they are no longer profitable. To keep them on, he said he would have to raise the price from $8 to $12, a price his customers wouldn't be willing to pay.

Food trucks, unlike brick and mortar restaurants, also have to consider transportation costs. Regular gas prices in New York are about $4 per gallon, up from $3.22 last year.

Syed, who asked to be identified by his first name only, runs a coffee and pastry food truck called 4 a.m. on the corner of 56th Street and Madison Avenue. Monday through Friday, he makes the drive from Long Island City in Queens to Midtown. Syed estimates that this past year, he has been paying $200 extra every week to fill up his tank. He’s also missing customers. 

"People work from home now," Syed said. "They only come two to three days a week. If they don't show up, there's no business."

To get more customers, Jamrock Jerk has been rotating through 12 locations every week, rather than just relying on Midtown office workers in a single location.

While food trucks like Jamrock Jerk have been able to cope with the inflationary environment so far, others are turning to the ballot box in the hope of change. Karagiorgos said he blames the administration for the state of the current economy. The former Democratic voter said he is never going to “make that mistake again” and will vote Republican going forward, while telling his friends to do the same.

“It’s a war in our pockets,” Karagiorgos said. “I'm just trying to survive at this point.”

Original article: Empty Offices and Inflation Are Threatening NYC’s Food Trucks