Raleigh restaurants face delays due to supply-chain disruptions, rising costs and labor shortages

A decision to change the materials for cabinets and countertops at her soon-to-open coffee shop in downtown Raleigh has Lindsay Wrege in a holding pattern.

Wrege planned to open 321 Coffee at 615 Hillsborough St. in May, then July. However, supply-chain delays have pushed that date back. Wrege isn’t sure when the establishment will open.

“I recognize that there might have been some delays, but I always assumed a delay would be like a week,” Wrege said. “And, two months of, literally, just it sitting there halfway done was completely unexpected [and] super disappointing, but just the reality.”

Wrege and other business owners throughout the Triangle are dealing with the reality of supply-chain disruptions, labor shortages and increasing costs. She couldn’t find a subcontractor for the construction of the cabinets and countertops.

“We are very fortunate in that everyone on our team – like the builders, the architects, etc. – are definitely doing the best they can. It’s just a difficult time to … be in construction,” Wrege said.

Construction started in February on 321 Coffee. It was supposed to be a 45-day build for the 500-square-foot structure.

“That has not happened, obviously,” Wrege said.

Wrege has started interviewing candidates to fill manager positions to make sure her establishment would have the proper staffing. She said it was a letdown to realize she will miss out on summer customers who can utilize the courtyard outside the space.

Wrege said her employees want to know when they can get started.

“I don’t know when the construction is going to be finished yet," Wrege said. “I don’t know when we’re going to be able get in there to train … We have a lot of people asking about soft-opening events, grand-opening events and like, there’s just a lot of unknown.

"That’s what’s really difficult when people want answers, and you just don’t have it."

The price Wrege has paid for building materials has fluctuated drastically.

“I think everything is fluctuating from the time that we were originally looking at materials to the time that we were placing orders,” Wrege said. “It's crazy. Like, some quotes that you get, they will say like, ‘Hey, this is good for like, one day or like one week.’

“Whereas, I think, more often you get quotes that will last for like 30 [or] even 60 days. And, it's again, because their supply chains are all over the place too. If prices go up for them, they would lose money if they locked us in. And so, it’s just recognizing that, I think, everyone is in this tough spot.”

Two restaurants, one building and months of delays

Like Wrege, Ari Augenbaum, COO of Richmond-based Still Deciding LLC wanted to have already opened his two establishments at 927 West Morgan St. in Raleigh: Soul Taco, a Latin and soul food fusion concept, and JewFro, a Jewish-African food concept.

Augenbaum had planned to open Soul Taco in September 2021. However, the business had issues with the permitting and application process. That led to scheduling issues with the contractor initially hired.

“I cried a lot,” Augenbaum said. “I’ve got a lot more gray hair.”

Soul Taco and JewFro will operate separately in the front of the house, but will share a kitchen led by chef Cady Carignan. Augenbaum and Carignan worked together years ago at the National Harbor in Maryland.

After months of delays, Augenbaum said he then wanted to open Soul Taco on June 29, but the establishment got vandalized.

“Unfortunately, due to the vandalism and as we’ll talk about delay[s] in the supply chain, they have told us that it’s going to be at least a week and a half to two weeks until they can source the glass to replace the window, so that’s obviously going to delay us another couple of weeks in our already extremely delayed project,” Augenbaum said.

Augenbaum is not sure when Soul Taco and JewFro will open.

“If I were doing this all again, and I were starting right now as opposed to starting a year ago when we initially signed a lease, I probably would put the plans on ice,” Augenbaum said.

The increasing costs have changed how Soul Taco operates its Richmond-based locations, and how it plans to open its Raleigh restaurant.

“Everyone sees this. You see it in the grocery store, you see it at the gas pump, you see it everywhere you go, a pretty significant increase in the cost of goods and availability limitations,” Augenbaum said. “We've had to make adjustments to our opening menu account for certain items that we cannot get consistently that we used to.”

For example, Soul Taco locations typically offer the oxtail “Al Pastor,” which is a taco with root beer braised oxtail, pineapple salsa chicharrones and agave hot sauce. Augenbaum said the cost of oxtail has increased about 225% compared pre-pandemic times, which led him to scrap the dish for the Raleigh location. He also mentioned how the increased food costs impact Soul Taco and JewFro differently.

“JewFro is an upscale, casual restaurant, and so if we were to charge $5 more for a steak, nobody is really going to bat an eye,” Augenbaum said. “On the taco side, there’s a limit to what you can charge for a taco.

“I can’t charge $8.50 for a single taco. Nobody is going to pay. It’s just crazy, and so, when you see these places like burger joints, pizza shops and taco places, they’re being hit the hardest because they can’t increase the prices beyond what the consumer will accept.”

Augenbaum also said the increased cost of labor has forced Soul Taco to scale back the items offered on the menu. He anticipates it will make operating the kitchen more manageable to cross-utilize certain ingredients.

“We can’t justify as many people in the kitchen as we would have liked,” Augenbaum said.

Augenbaum explained how it feels to have the openings take much longer than he initially anticipated.

“It’s extremely painful and it’s extremely disheartening,” Augenbaum said. “I mean, we have three active restaurants in Richmond, Virginia, right now, and every dollar that we’re following into the Raleigh operation essentially has put us in a position where we are not making money right now because we keep putting every extra penny to a space that is not generating revenue.”

To mitigate some of the losses in the interim, Augenbaum said Carignan launched two ghost-kitchen concepts out of the space at 927 West Morgan St. since it has passed its necessary inspections:

“What the Cluck? I thought we were getting a Soul Taco”: A fried chicken concept available through online ordering only using services like GrubHub, DoorDash and UberEats

D. Wade Burgers, which is Dwyane Wade’s burger concept

“Obviously, every month that we’re not open, we’re losing money,” Augenbaum said.

Almost open

Soul Taco, JewFro and 321 Coffee are far from the only restaurants throughout the Triangle and across the country that are due to open, but are facing delays.

For example, Longleaf Swine co-owner Adam Cunningham plans to open a barbecue restaurant in late August or early September in Raleigh at 300 E. Edenton St.

Wrege offered advice to anyone trying to open a restaurant given the current economic conditions.

“Keep an open mind when you’re building a team and recruiting,” Wrege said.

Wrege also operates a 321 Coffee location at the State Farmers Market. She said there are plans to open a third location at 300 Morris St. in Durham.

“I am very much taking that timeline with a huge grain of salt,” Wrege said of the timing for the Durham location’s opening.

321 Coffee provides jobs to people with intellectual and developmental disabilities.

“It’s been so cool just throughout this process of announcing the new location how supportive Raleigh and a lot of the local … other tenants, companies [and] people who live in the area have been,” Wrege said. “They’re so excited for us to open there so we can be a part of their daily routine, and that means a lot to us.”

321 Coffee’s Farmer’s Market location opened in 2019. Wrege said it’s been her dream to open a coffee shop in downtown Raleigh.

“It’s going to be an awesome day,” Wrege said. “Now that it’s here and it’s happening, like, it’s not every day that you really get to see a true dream turn into a reality, but like that day is going to be such a team victory for us.”