Inflation: Small business owner on how he's adjusting prices

The May jobs report showed leisure and hospitality trending upward, with the food and services sector seeing over 33,000 jobs added. Ron Silver, Bubby's Chef & Owner, joins Yahoo Finance Senior Reporter Alexandra Canal at Bubby's Tribeca in New York City to discuss the state and importance of restaurant talent, the impact of inflation on the restaurant industry, and post-pandemic business.

Video Transcript

BRAD SMITH: The May jobs report dropped earlier this morning with the leisure and hospitality industry trending upwards. The vast majority of them were in the food services and drinking places, those jobs added, with over 33,000 positions added in that sector alone. We've got Yahoo Finance's Ale Can now live from Bubby's Tribeca location in New York City. She's joined by Bubby's chef and owner, Ron Silver. Ali, take it away. Nice spread.

ALEXANDRA CANAL: Hi, Brad. And as you can see, we're at Bubby's. Look at this spread. It is popping here on a Friday, one of the hardest brunch reservations to get in New York City. Ron, thank you so much for joining us today.

RON SILVER: Thank you for having me.

ALEXANDRA CANAL: You've been in business for 33 years. From a labor perspective, what's the secret to attracting that talent, both the waitstaff as well as your cooks?

RON SILVER: Well, a lot of people who have worked at Bubby's have been here for 20 years or more than that. Some people started when they were like 14, and they're 40 now. So one of the things is just that we have a real community. We pay a lot more than most restaurants do. And well, when Bubby's is successful, all of my entire crew is successful.

ALEXANDRA CANAL: You said you pay more than most restaurants. So what sort of incentives are you offering employees? And really, what do they want right now?

RON SILVER: Well, what they want right now is to be paid well and to have a personal life respected so that there's, you know, so that it really is not-- I think there's a certain amount of freedom of having a personal life that may not have been thought about before the pandemic. And I would say that there's more flexibility right now and more sort of liberty in our crew.

ALEXANDRA CANAL: So you have hourly wages, and then on top of that is the tipping.

RON SILVER: We have some of our crew gets tipped, the front of the house gets tipped, and the back of the house doesn't get tipped.

ALEXANDRA CANAL: Got it. And in terms of tipping, we're dealing with inflation, a lot of high prices right now. Are you seeing consumer behavior shifting on the amount that they're willing to tip servers?

RON SILVER: I have not seen anything like that, and I haven't heard anything like that here. So it seems like everybody's happy at Bubby's.

ALEXANDRA CANAL: And you brought up the pandemic. We're in this post-pandemic world now. How were you able to weather that storm from a labor perspective and really keep the doors open during that time?

RON SILVER: Well, we really were flexible and had a lot of enthusiasm to do whatever we could. And as soon as we could open our doors, we did. You know, I grew up in Utah in the mountains. I'm sort of used to thinking about eating outside in weird weather. And so we really were able to lean in to all the opportunities as they happened without sort of wondering if it was Armageddon or a pandemic.

ALEXANDRA CANAL: I admit. I was one of those people that weathered the storm quite literally in order to eat outside. And when we talk about inflation and price increases, have you had to raise menu prices and pass on some of that cost to the consumer?

RON SILVER: We have had to do it, and we've been very judicious about it. We're really making sure to just sort of cover our expenses rather than turning our price point into something else because for Bubby's, Bubby's has a certain sort of middle point where we fit in. And I don't want to start getting into the overly expensive category.

ALEXANDRA CANAL: And where have you seen the biggest price increases? We've seen certain ingredients like eggs skyrocket, and that's a place--

RON SILVER: Eggs, chocolate, coffee, you know, meat all kinds of things just inching their way up for all kinds of reasons.

ALEXANDRA CANAL: So how do you battle those inflationary pressures?

RON SILVER: I mean, we really just keep a close eye on our costs, and we adjust when we need to. We don't hesitate to do it if we need to. And so far, it's worked out. And I would say that in the end result, our check averages up maybe 5% from what it was or 6%.

ALEXANDRA CANAL: And are you seeing consumers change the way they order, maybe ordering less, sharing more?

RON SILVER: Well, no, I think that people are people who are coming to Bubby's seem to be having the same experience as they were before or more so in a way.

ALEXANDRA CANAL: OK. And then in dining versus delivery, because during the pandemic delivery really became a popular option, are you seeing those levels revert to pre-pandemic times? Are you still seeing delivery a very popular option right now?

RON SILVER: Well, what we saw really was that our delivery business went up by about 500% and stayed there. So it really is a completely new revenue center for us in a meaningful way, the delivery business.

ALEXANDRA CANAL: And is in-dining back to pre-pandemic levels?

RON SILVER: We're up probably about 40% from pandemic.

ALEXANDRA CANAL: Now, I know you have a new cookbook. You're rereleasing this.

RON SILVER: Yes.

ALEXANDRA CANAL: All about pies.

RON SILVER: It's all about pie, pastry, seasonality.

ALEXANDRA CANAL: OK. I'm someone that really can't cook a pie. So what is the secret to being able to create something like this?

RON SILVER: Well, one thing is that this is sort of the pinnacle. But there's ways to make, for example, a cookie crust pie that's so easy with Graham crackers. And there's homemade Graham cracker recipe, if you want to do that. Or you can buy commercial ones. so there's all kinds of levels of pie to make in there. And it's really worth learning how to do a flaky pastry crust, even though it takes a long time to be able to do it.

ALEXANDRA CANAL: It's a labor of love, right?

RON SILVER: It takes years and years to figure to really understand it because you have to go through all the seasons or it changes all the time, and it really is a learning process.

ALEXANDRA CANAL: All right. Well, I personally want to try some of this. I believe this is the rhubarb pie, right? That's your favorite one?

RON SILVER: Strawberry rhubarb, yes.

ALEXANDRA CANAL: All right. Well, guys, we're going to keep enjoying this pie. Back to you in the studio, Brad and Julie. I know you guys are jealous that you're not here with me right now.

RACHELLE AKUFFO: I feel like you're playing with my emotions right now as I'm looking at all that food. It looks fantastic. Thank you so much our very own, Ale Canal.

ALEXANDRA CANAL: Amazing.

RACHELLE AKUFFO: Well, we want to give a shoutout to our head of live, Val Caval, who's worked so hard to get us a true pulse check on the labor market this jobs day, putting in that work there as you can see. Always lovely to see, Thank you, Val.