Bao Bei Chinese Brasserie Gets Real About Inflation

 If you’re finding it more and more expensive to eat out these days, there’s a good reason: Inflation is hitting restaurants hard, too.

According to Restaurants Canada, from 2021 to 2022, restaurants have seen an average 15 per cent increase in their food costs and a 12 per cent increase in their labour costs.

Bao Bei Chinese Brasserie, which means "precious" in Mandarin, opened its doors in Chinatown, Vancouver, in January 2010. Ten years later, during the global pandemic, the restaurant had to close its doors temporarily and has weathered many storms in the three years since, including staggering price increases.

Alain Chow, the operations manager of Bao Bei, says they have seen an increase of 30 to 40 per cent when ordering supplies for the restaurant. According to Chow, frier oil, which in 2019 cost $24 for a 16-litre jug, now costs anywhere between $53 to $68. Pea Tips, which used to cost between $30 and $50 a case, now cost $75 a case.

“The headwinds aren’t quite a gale force or anything like that, but they're quite strong,” said Chow.

Bao Bei has passed some of those costs on to its customers in the form of higher menu prices. But it’s also absorbed some of the difference in the form of tighter profit margins.

“Our profit margins are usually five to eight per cent. We’re not meeting that at the moment,” said Chow.

Some customers have complained about changes to the menu or price increases, said Chow, but many understand that the restaurant has no other option. “That’s how they have to turn on the lights, pay the rent, and pay their workers.” 

Bao Bei aims to provide a place where the guest experience is unique to Vancouver’s Chinatown, said Chow. They offer a dinner-only service with a focus on small sharing plates.

During the pandemic, Chow said Bao Bei had tried to find other ways to bring in revenue, such as selling its sauces and dumplings in the store and through Legends Haul, an online grocery delivery service. The restaurant also swapped out some vegetables on their menu for cheaper items, such as yu choy or broccoli, and continues to find creative ways to keep their doors open.

“We have hope. Otherwise, we would not continue to do what we're doing,” said Chow.

“The hope is that the economy recovers and people start spending again. The inflation rate is already coming down from 6.9%, so hopefully, with higher interest rates and less free-spending, there will be more capacity in the economy, and restaurants can start to recover.” 

Photos below. High-resolution photos can be found here. 

Bao Bei Chinese Brasserie is located in Vancouver's Chinatown. The neon sign, which was created by Glasfurd & Walker and Bao Bei's owner, Tannis Ling, is inspired by Chinese medicine, dumplings, and the neon signs that were nearly banned from Vancouver in the early 1970s.

Alain Chow, operations manager of Bao Bei Chinese Brasserie, goes over the costs of doing business in the morning as the restaurant prepares to open for dinner service. "I love restaurants. I love food. I love conviviality. I love people having a good time, and I can't think of a better, more accessible way for people to have a good time than to share a good moment with friends, family, strangers, or lovers over food," says Chow.

Tannis Ling, the owner of Bao Bei, also owns the building, which means there hasn’t been a significant rent increase, and because the restaurant is 13 years old, most of the equipment has already been paid for.

The cost of food in Canada rose by 10.4 per cent in January of 2023. According to British Columbia's Consumer Price Index, restaurants have seen a six per cent increase compared to the previous year, but restaurants say their numbers are higher.

Flour, which Bao Bei uses to make their flatbread, dumplings, and steamed bread used to cost $15 for a 20-kilo bag, now costs $28 for a 20-kilo bag.

The labour shortage has made it challenging for the restaurant to find and maintain staff. “The restaurant industry is a hard, labour-intensive, stress-induced, low-reward business,” says Chow.

A lineup forms outside the door ten minutes before opening at 5:30 p.m. Bao Bei is one of the most popular restaurants in the city, but the staff say they feel nervous because of the staff shortages. By the time 6:30 p.m. rolls around, the restaurant is packed, and the hostess is adding names to a waitlist.

The mantou buns are one of the most popular items on the menu, with more than half a dozen coming out on the pass simultaneously. This dish's two main ingredients, flour and pork, have continuously risen in price due to inflation.

This receipt showcases the cost of a meal for two at Bao Bei. Drinks cost nearly as much as one dinner item, but beverages have historically been where restaurants make money. "The alcohol in drinks is our profit center. It costs way less labour to open a bottle of wine and serve it than to make a dish. That $17 drink helps turn on the lights, pay the rent, pay the workers, and helps with cleaning, garbage, plumbing, and taxes," says Chow.

Despite the struggles, Bao Bei remains a favourite among many Vancouverites, and the restaurant has not lost hope.