Why Your Favorite Dallas Restaurants Are Stuggling: Part 1, the Toll of Tariffs

Every time Chad Dolezal hears another threat from President Donald Trump about tariffs — and it seems like there’s a new one every couple of days — all he can do is hope it is nothing more than the usual rhetoric.

“I just kind of hope, ‘Please don’t do it,’” says Dolezal, the co-owner of Cenzo’s Pizza and Deli in Oak Cliff’s Bishop Arts, who has been busying remaking his wine and beer list as prices go up and products disappear thanks to the tariffs. “We really, really, really need some consistency in our prices, and all the tariff talk does the opposite.”

In just the last couple of weeks, Trump has threatened tariffs against a handful of European countries over his attempt to annex Greenland; France, because its president refused to join his new Board of Peace initiative; and countries that sell oil to Cuba, including Mexico.

‘Unpredictable is the New Normal’

It’s no wonder Dallas restaurateurs consider tariffs one of the biggest problems over the past year. According to a TouchBistro study that begins with the statement “Unpredictable is the new normal,” 82% of U.S. restaurant operators say that tariffs and trade policies “directly contributed to their restaurant’s inventory challenges” last year.

Additionally, the Texas Restaurant Association asked owners whether costs have increased due to tariffs. Only 10% responded that none of their costs are affected by tariffs. Fifty-eight percent said that food and beverage costs were up because of tariffs, and 46% responded that utensils and to-go items cost more because of tariffs.

This is compounded with other struggles that restaurants have been facing in the past few years, including skyrocketing rents, labor shortages and consumers cutting back on eating out.

A Tariff Trifecta

The impact of tariffs comes at a particularly bad time for several reasons.

• First, many foreign producers and their importers absorbed some of the initial tariff costs, including 15% for most EU alcohol products and 25% for Mexican beer and spirits, hoping tariffs would be short-lived. But when the tariffs were more than a fleeting threat, some raised prices while others stopped exporting to the U.S. Dolezal says those increases forced him to add $1 to the price of a bottle of Peroni, about the cost of the tariff.
• Second, the value of the U.S. dollar has plummeted to a four-year low, making imports that much more expensive.
• Third, Trump imposed tariffs of as much as 50% on aluminum; hence, canned beer has been clobbered, since aluminum is its highest cost. Dolezal says wholesale prices for some canned beers have gone up so much that he’d have to charge $11 a can, and who would pay that – even if he felt OK asking that much?

“It’s certainly not getting any easier,” says Stephen Roussos, PhD, the co-founder and co-owner of R&R Selections, a Dallas-area importer that specializes in Greek wine and works with a variety of North Texas restaurants. “I’ve spent a lot of time making a lot of calls and I’ve spent a lot of time worrying.”

Luckily for him and some of his restaurant customers, Greek products haven’t been affected by many of the changes since the initial round of tariffs last year. Though he notes that he still has to pay attention to threats, those alone can rattle markets.

Quiet Hope

On the other hand, many we spoke to for this article say many in the industry are lost in the dark, scrambling from day to day to find wine, beer, and spirits that fit their menu, offer decent quality, and that their customers can afford. It’s one thing for a steakhouse to charge $300 for a bottle of wine; it’s another for a pizza or sandwich spot to charge $11 for a can of beer.

But it’s also difficult to get an exact handle on the full impact of tariffs; thanks to the nature of the Trump Administration, the issue has become so politicized that restaurants don’t want to be forced to pick a side. Several declined to be interviewed for this article for that reason.

So, for the time being, it’s watch and wait — and keep hoping against hope that the tariffs don’t cause even worse problems.