Bar owner reveals why BLT sandwiches now cost $16

A restaurant owner has explained how raging inflation means he has to charge $16 for a BLT sandwich but still makes less than $2 each.

Brian Will, boss and founder of the Central City Tavern sports bar chain, decided to speak out after a friend confronted him about his sandwich prices.

The ingredients — bacon, lettuce, tomato, mayonnaise and bread — cost $5, an increase of more than a dollar from three years ago.

But Will says rising costs for staff, rent and utilities have been a much bigger blow, forcing him to raise the price of a BLT from $13 three years ago.

He pointed out that in one of his restaurants alone, these three costs – along with cleaning, maintenance and accounting – amount to almost $90,000 per month.

Brian Will, the CEO and founder of Will Restaurants Investment Group, said he makes less than $2 on every BLT sandwich he sells at his restaurant in Alpharetta, Georgia, thanks to rising costs

“The rent is $20,000 a month,” he said. “My utilities are $6,000 a month. My labor in December was $60,000, so I will have $86,000 in basic expenses per month the day I open the doors,” Will said.

He sold sandwiches for $16, but he said he would still have to sell more than 94,000 a year to generate sales of about $1.5 million and break even. That amount covers all costs plus ingredients.

‘If I turn over €1,499,000, I lose €1,000. “We won’t start making a profit until we get above that breakeven point,” he said.

Of course, he doesn’t just sell BLTs at Central City Tavern’s two upscale sports bars in Georgia. But he used the example of the popular sandwich – which has typical costs and profit margins for food and drinks – to provide insight into the restaurant world.

He said his situation would be similar to restaurants in the US, where $16 is now a typical price.

After ingredients, wages make up the largest portion of the BLT, at $4.61. The rent is $1.54 and other costs – such as cleaning, maintenance, music and TV costs, accounting – total $2.48. Electricity, gas and water cost $0.46.

He would still have to pay taxes on his $1.92 profit.

Will works with a food cost percentage of around 32 percent – ​​standard for the industry. That’s the cost of all the ingredients used to prepare one dish, as a percentage of the retail price – in this case $5 divided by $16.

He said his Central City Tavern in Alpharetta operated with a food cost percentage of just 26 percent last year, but ingredient costs were rising.

And expensive rent, labor and utilities further drove up the food cost percentage. Compared to three years ago, Will said employment alone is up 30 percent.

‘Labor is the big killer. Since Covid, our labor costs have skyrocketed,” he said.

Utility costs (such as electricity, gas and water) have also increased by 30 percent, but because they make up a much smaller portion of the restaurant’s overall expenses, they haven’t had a major impact on the bottom line, Will said.

Rents have increased by 3 percent every year since 2019, as evidenced by a lease signed before the Covid-19 pandemic.

“It’s just a constant struggle to figure out where to set the price and how much profit you can make while still staying in business,” says Will.

“If a typical restaurant makes a 10 percent profit and your food costs increase by 3 percent, your labor increases by 3 percent and your rent increases by 2 percent, then suddenly there’s no more money.”

Pictured is the $16 BLT sold at the Central City Tavern in Alpharetta, Georgia

Central City Tavern charged $13 for a BLT in 2013. At the time, the cost of the ingredients was about $3.40 – almost $2 less than today

And then he lists a whole host of other ‘operational costs’.

“People don’t realize it costs $3,000 a year just to play music. It costs $8,000 a year just to turn on the TVs,” he said.

“You still have an accounting department charging you. You still have the salaries of the district managers, you have to pay for towels and carpets. And you have to pay for knives, mops and cleaning crews,” he said.

‘If someone sends a sandwich back because we didn’t make it right, I lose all the costs in one sandwich. “To make up for the losses on the one returned sandwich, I have to sell eight sandwiches at a profit of $2,” he said.

Additionally, food costs can be volatile, making it very difficult to price the menu correctly.

“My food costs might be 40 percent this week and maybe 22 percent next week because the suppliers change our prices weekly, but we can’t change our menu weekly,” Will said.

“I have allowed my food costs to increase over the past three years, which has increased my expenses, but I do that so that I can at least keep my prices as close as possible to what consumers are buying.”

And ultimately, the rising cost of the sandwich also has a detrimental effect on Will’s business, decreasing his income.

“My sales are down 15 percent in the last three years,” he said. “It’s clear we’re losing some customers who just don’t want to pay these prices.”