Texas restaurant food, supply costs impacted by unrest in Middle East

AUSTIN (KXAN) --- Issues in the Middle East are expected to impact restaurants right here in Texas.

According to the Texas Restaurant Association, it has to do with ongoing conflict around the Red Sea that's leading to shipping delays.

The TRA said higher costs for goods could hit restaurants in the next few months as a result.

Conflict in the Red Sea

Yemen's Houthi rebels started attacking commercial ships in the Red Sea back in October.

Ships changed their routes to avoid attacks. The Houthis said their attacks are meant to pressure Israel to end its war against Hamas in Gaza.

The Houthis have launched more than 50 attacks on shipping, seized one vessel and sank another since November, according to the U.S. Maritime Administration.

Houthi attacks have dropped in recent weeks as the rebels have been targeted by a U.S.-led airstrike campaign in Yemen.

Shipping through the Red Sea and Gulf of Aden has declined because of the threat.

The Houthis have said they will continue their attacks until Israel ends its war in Gaza, which has killed more than 34,000 Palestinians there.

The war began after Hamas-led militants attacked Israel on Oct. 7, killing 1,200 people and taking some 250 others hostage.

Impact on Texas restaurants

Texas Restaurant Association President and CEO Emily Williams Knight said about a trillion dollars worth of trade goes through the Red Sea every year.

The ships are carrying goods needed right here in Texas.

"It's everything from equipment. It can be paper goods, dry goods," Knight said. "Merchandise that you might sell."

Knight said food and supply costs won't come down anytime soon as a result.

"The amount of shipping capacity has reduced. Its increased shipping costs tremendously," Knight said. "Shipping costs are going to make the items more expensive."

On the bright side, Knight said May is a busy month for restaurants with Mother's Day, graduations and other celebratory events.

The TRA hopes that will drive customers to dine out.

'See some things creep up again'

It's become more expensive for Industry, a restaurant in East Austin, to keep up with the growing food and supply costs.

Owner Harlan Scott does the one thing he does not want to do: charge customers more.

"I've raised my prices so many times over the past year, and it pains me to continue to do it. No one's complaining because they see it everywhere," Scott said. "It's starting to affect how often they're coming out, and how much they're spending."

Scott said with this unrest in the Red Sea, he's worried about not getting some of the fundamental goods they need.

"Things that we take for granted, like grains and starches, which also bleed into like flour," Scott said.

Scott said while he can't control what's happening overseas, he can focus on creating a great experience for customers at his restaurant.

"Connect more with our customers and really lean into the relationships that we have," Scott said. "Nurture the relationships that we do have with our regulars. Our regulars are our lifeblood."

Scott said its also important to open up with customers about their struggles as a restaurant.

"Maybe they'll spend a little more with us and spend a little more time with us, if they understand the situation we're in," Scott said.