DENVER — After 120 years of serving steaks, The Buckhorn Exchange isn’t about to become a pasta joint.
But major beef price hikes in certain high-end cuts will soon eat into their bottom line.
“We’ve been notified that our prices are going up, and they’re going up significantly,” said Bill Dutton, the general manager and partner of Denver’s oldest restaurant. “Anytime you see price hikes of 20-30 percent, it hurts.”
Dutton said other steakhouses have been seeing the impact for the last few weeks, but he has a long-term contract that has shielded him. In the next few months, though, he has learned his New York Strip will go from costing him about $11 per pound to about $15 per pound.
“There’s a premium price to pay for it, and now, evidently, there is a bigger premium price to pay for it,” said Dutton. “A price hike on that is going to brutalize it, but it’s not like we can’t serve it anymore. It’s a signature item.”
While some businesses have blamed the price increase on Trump’s trade deal opening U.S. beef sales to China, the National Cattleman’s Beef Association (NCBA) said it is tied to consumer demand.
“That seasonal increase has been quite strong this year, because there is a lot of demand in the marketplace for steak,” said Alison Krebs, the director of Market Intelligence for the NCBA.
Statistics show in the last two months, choice cutouts wholesale prices have also shot up almost 20 percent, which also affects restaurants.
“They are seeing those higher prices right now at wholesale, which is going to pressure their margins a bit more,” said Krebs. “Bottom line, beef is still bringing a lot of dollars to their operations.”
At Buckhorn Exchange, they are renovating the kitchen and reworking the menu with smaller portions and a more elegant presentation to help absorb the price hike.
“The value is still there,” said Dutton. “You’re just giving them a little more for the eyes and less for the stomach, and they’re happy because that is the trend for the restaurant business.”
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