Some restaurants are tacking COVID-19 surcharges onto customer bills

Joanna Fantozzi

As restaurants begin to reopen across the country, a new trend of COVID-19-related consumer bill surcharges is popping up. From charges for healthcare coverage to fees for climate change, surcharges have become a growing trend in restaurants. While they usually serve to call attention to growing labor costs, the latest batch of surcharges is being implemented by some restaurants across the country to mitigate rising costs related to coronavirus challenges, including supply chain shortages and rent struggles.

At Goog’s Pub & Grub in Holland, Mich., their decision to implement a $1 surcharge was related to rising food costs.

“Our beef costs have almost doubled now, along with rising costs across the board on many of the products we serve,” the restaurant posted on Facebook on May 5. “Add that to the already thin margins we’re operating at due to loss of alcohol sales and the takeout supplies included in every bag of goodness we pass out the window, and we’re at a crossroads.”

They added that the decision was not “out of greed” but rather an attempt to “keep the lights on” while they navigate the new normal in a world of COVID-19 recovery. Although most of the customer comments in response to the announcement were positive, Goog’s Pub & Grub did not respond in time to request for further comment on the matter.

Related:California restaurants add voluntary 'climate change surcharge' as part of Anthony Myint's Restore California initiative

But not all of the reactions to these surcharges have been positive. Bootleggers BBQ — a West Plains, Mo. casual barbecue restaurant — implemented a 5% surcharge on May 8. Although restaurant owner Brian Staack said that their regular customers have been understanding, once the story of the surcharge went viral on social media, he was forced to rethink his strategy:

“Unfortunately, with the story going viral, I have received death threats, threats to burn our restaurant down, people verbally abusing staff on the phone,” Staack told Restaurant Hospitality. “None of the phone calls came from our area, only two were even from Missouri, the rest were from out of state.”

As a result of the abuse aimed at his restaurant and staff, they made the decision to drop the surcharge and reprint new menus with raised prices on them.

“Our plan was to raise or lower the percentage depending on our deliveries and invoices,” Staack said. “Since changing menu pricing and dropping the surcharge we have had an outpouring of support from our customers and community.”

Bootlegger’s BBQ is not the only restaurant to receive backlash for their decision to implement a surcharge. For Kiko Japanese Steakhouse & Lounge in West Plains, Mo. the 5% surcharge was added on May 6 in order to avoid having to raise menu prices.

Related:Restaurants re-work the food-cost equation

"We were hoping to adjust the charge weekly based on the prices we get from our suppliers instead of raising all of our prices across the board on our menu," owner and managing partner Billy Yuzartold NBC Today. "We also planned on taking this surcharge off completely once all the prices return to normal."

A photo of a receipt from Kiko showing the surcharge made the rounds on Twitter with the caption “Scuse me ... what? A covid surcharge...? [sic]” and received strongly worded responses like, “Is this even legal?” or “I would not come back.”

As a result of the ensuing social media controversy, Kiko Japanese Steakhouse & Lounge had to issue a response on their Facebook page:

“We are not trying to hide this surcharge, we choose this option rather than changing our prices on our menu, this way we can adjust the surcharge weekly,” restaurant owner Yuzar said in the Facebook post. “We’ve been putting flyers in front of our restaurant & put the surcharge on your receipt, today we put more signage. Please understand we can’t control the rising cost of meat, seafood, poultry and produce prices.”

Kiko Japanese Steakhouse & Lounge did not respond to request for further comment.

Contact Joanna Fantozzi at [email protected]

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