Austin/ Retail & Industry
AI Assisted Icon
Published on May 03, 2024
Texas Restaurants Face Rising Costs as Middle East Unrest Disrupts Shipping RoutesSource: Unsplash / {Jay Wennington}

A ripple of unrest in the Middle East is sending shockwaves through Texas, with restaurant owners bracing for the economic impact. The Texas Restaurant Association (TRA) warns of potential hurdles and rising costs for dining establishments across the state due to disruptions in Red Sea shipping routes caused by conflicts in the region.

Yemen's Houthi rebels, in defiance of maritime security, have escalated tensions by targeting commercial ships since last October, a move they claim pressures Israel to cease action in Gaza. These disruptions have forced ships to adopt altered paths, engendering notable shipping delays and increased transportation expenses. According to KXAN, the conflict has led to the seizure of one vessel and the sinking of another, with over 50 attacks on shipping to date. Meanwhile, TRA President and CEO Emily Williams Knight emphasized in a statement obtained by Austin Business Journal the global reach of Texas's restaurant supply chain, with an estimated trillion dollars worth of trade passing through the Red Sea annually.

These geopolitical tensions are not without their local consequences. Knight foresees higher costs for goods affecting Texas restaurants in the coming months, anticipating a "tremendous" increase in shipping costs making items more expensive. Amidst such untimely disruptions, May beckons as a busy month for eateries due to Mother's Day, graduations, and a host of celebratory events, providing a crucial season for businesses to bolster consumer support.

The strain is palpable among local business owners such as Harlan Scott of Industry, an East Austin restaurant. Scott disclosed to KXAN the challenges of managing escalating food and supply costs, a burden that has forced him to repeatedly increase prices—a move he's loath to make. "Randomly we’re starting to see some things creep up again," Scott said, noting the difficulties in procuring basic goods like grains and starches essential to the restaurant's operation.