Students at the University of California, Davis, are now paying more for their food—but some of them may also be getting a pay raise. Beginning in September, Associated Students Dining Services (ASDS) increased prices on many of the menu items sold at the ASUCD Coffee House, CoHo South Café and CoHo To Go locations. This is the first increase since 2010, and was largely driven by a mandated increase in California’s minimum wage—from $8 an hour to $9 an hour—which went into effect in July, according to Darin Schluep, foodservice director for ASDS.
As a part of Associated Students at the University of California, Davis, ASDS operates on a break-even financial basis, and the minimum wage increase meant that Schluep had to account for additional labor costs of approximately $250,000. “We employ about 300 students, and they’re all hourly, all minimum wage,” he says. “As a break-even operation, we had to figure out a way to make that even out.”
But while the minimum wage increase is directly tied to ASDS’ labor costs, Schluep says that he didn’t have to reduce staff. Instead he actually increased his staff size based on the growth of the operation as well as an increase in campus population. “This year’s freshman class is the largest in [UC Davis] history,” Schluep says. “We built staff to meet those demands.”
Schluep’s decision to increase food and beverage prices began immediately after he heard the news that the minimum wage increase had passed. To start, groups of ASDS student employees compared food prices with other foodservice operations, both on and off campus. “We tout ourselves as the best deal in town,” Schluep says. “We wanted to maintain that and make sure we were competitive, even with a price increase.”
Once the price comparison data was compiled, Schluep evaluated his entire menu mix—approximately 400 items—and made adjustments where he could. The menu items that did go up in price increased an average of 8%, which translated to approximately 10 cent to 15 cents per item. Schluep tried to maintain prices on healthy items such as whole fruit and yogurt. “I tried to be as strategic as I could,” he says of the price increases.
For the most part, Schluep says that student customers, faculty and staff have been understanding, something that he attributes in part to the minimum wage increase being featured prominently in state and national news. “We also armed our cashier staff with talking points since that’s where we figured customers would voice concerns,” he says. “We understand it’s not an easy thing to absorb sometimes, and it’s always a challenge to get the word out and let people know what’s going on.”
This might not be the last price increase, however. Schluep says that food and beverage prices are always something he’s evaluating. The California minimum wage is set to increase by an additional dollar an hour in January 2016, and Schluep says that he doesn’t know if he’ll need to make another adjustment when that happens—but if he does, it won’t be a decision that he’ll take lightly. “I was a student at UC Davis. I paid my way and I know what it’s like to have a shoestring budget,” he says. “When we look at price increases, it’s a big deal.”