Higher costs and fewer customers killing Texas BBQ joints

The Satellite
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https://www.texasmonthly.com/bbq/higher-costs-fewer-customers-killing-texas-bbq-joints/

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They are pricing themselves out of business whether that is because of higher beef prices or whatever, the price of brisket is out of control. I’m not paying 30 dollars a pound for the worst cut of meat on a cow lol

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If their cost for the beef goes up, they have to raise their price or take lower margins, or both.

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That’s why I’m hitting the Pappa’s BBQ over by St. Agnes as often as I can before they shutter the doors.

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Winning.

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What the article is missing is the insurance cost and how small businesses are being affected by it vs middle to large companies. This is becoming a huge National story.

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Well have a reference story to add to that? Not saying insurance isn’t hurting small business as it’s one of the many costs that are rising.

I would expect that the rising cost of meat would be the larger problem for BBQ restaurants than rising cost of insurance.

The meat costs are more variable unless you’re going to find a way to lock in a price and the cost will instantly need to push your price to consumers up or your margins down, if not both.

Whereas insurance would be more stable because you typically sign a longer term policy of six months or a year, it wouldn’t vary month to month.

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Story? You betcha. Small companies insurance cost have tripled since the affordable care act. It is well documented.

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Can we keep this focused on this story specifically and not derail it?

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It is 100% part of operating a small business.

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What I’ve seen is that many of these places try to expand and get squeezed by rent, and employee costs, product prices and lower traffic than expected because of bigger picture economic pressures. They could overcome one or two of those not going right, but not all.

Those that stay with a food truck or already own the building and equipment are generally able to push through.

But kind of like the microbrewery craze that has now cooled, the BBQ market doesn’t have an unlimited ceiling.

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Stick to this topic. BBQ joints. Thanks.

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I think you’re quite right on this @coogman91

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I’m sure real estate is a big part of the story. But are BBQ joints closing in larger numbers than other restaurants?

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A great friend of mine (his daughter went to UH) He owns a small business. Yes insurance cost are a major issue.
BBQ joints are small businesses.

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We aren’t making this about the affordable care act. Moving on. Please don’t derail this.

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I don’t have the data to back it up, but my sense is that this is happening across the industry. I think BBQ spots are just more personal to Texans than when a bunch of Torchy’s or Paneras shut down. And the other thing is that they’re generally started up and run by locals, so the neighbors feel it more when they shut down.

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You might be right.

I think the cost of beef is potentially just another straw for bbq joints.

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Here’s where I know this is BS and it’s a business decision but they follow trends

A baked potato by itself has hardly gone up
Cheese ain’t went up that much nor onions, sour cream, butter, etc

But some of these places are charging $20 with small portions of meat - if you ask for no meat it’s still $12

That’s called price gouging there

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Part of it is also that many of these BBQ owners just aren’t great at running a business. That’s fine when the margins are healthy, but it’s a killer when they aren’t.

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