The $21 Sandwich
When Small Businesses Wage a Silent Economic War
In 2021, Honolulu's E.A.R.L. – a sandwich joint beloved for its no-nonsense East Coast-style subs – served its signature Italian sandwich for $16.50. Today, that same sandwich costs $21.50 – a price that whispers a louder economic story than mere inflation. Underneath the numbers lies a battle for survival, one that echoes the challenges of small businesses everywhere.
The Real Cost of Eating Local
Despite appearing as a straightforward price increase, it's actually a complex game of rising costs and shrinking margins. The Italian sandwich – a lavish assembly of prosciutto, capicola, soppressata, mozzarella, and fresh vegetables – has become an unexpected economic indicator.
The problem? Costs have surged by 21% in just three years, fueled by skyrocketing food, labor, and operational expenses. This is happening against a backdrop where overall food inflation in the U.S. hit 25% between 2020 and 2023, with essentials like eggs spiking by 70% and beef prices climbing 28%.
The Brutal Math of Survival
Numbers don’t lie:
Ingredient costs leaped 28%, from $4.42 in 2021 to $5.67 in 2024.
Labor and overhead costs now consume 60% of each sandwich’s price, even after E.A.R.L. streamlined operations.
Even mayonnaise tells a story: it went from $12 to $21 per gallon.
Nationally, labor costs have followed suit. The average hourly wage in the restaurant industry rose 22% from $14.50 in 2021 to $17.80 in 2024, reflecting the pressures businesses face to retain talent in a tight labor market.
"We’re not just selling sandwiches," says Justin Parvizimotlagh, E.A.R.L.’s co-owner. "We’re navigating an economic minefield."
The Invisible Squeeze
E.A.R.L.’s journey mirrors countless small businesses fighting to survive:
Two locations in 2021, three in 2024.
Staff expanded from 22 employees to 45.
Relentless optimization to bring prime costs (food + labor) back to 60%.
But here’s the kicker: even with these efforts, margins remain razor-thin. Raising prices isn’t about thriving – it’s about surviving. Nationwide, 61% of independent restaurant owners report that rising operational costs have pushed them to increase menu prices, yet many say it’s still not enough to maintain profitability.
The Bigger Picture
This isn’t just E.A.R.L.’s challenge – it’s a snapshot of a broader crisis facing small businesses nationwide. Companies are being forced to:
Reimagine operations to maintain quality and keep the lights on.
Negotiate harder with suppliers for every penny.
Balance customer loyalty with the need to remain profitable.
The uncomfortable truth? Customers often see a price hike as an inconvenience, while for businesses, it’s a lifeline. According to a recent survey, over 45% of small businesses now say that rising costs are their biggest obstacle – outpacing even staffing shortages and competition.
Lessons for Entrepreneurs
What can other entrepreneurs learn from this story?
Adapt Quickly: Businesses that survive are those that can pivot and optimize. For E.A.R.L., this meant streamlining prep work, negotiating with suppliers, and carefully balancing costs.
Invest in Technology: Nearly 30% of small businesses are turning to automation and tech to cut costs and improve efficiency. From smarter inventory management to automated scheduling, technology isn’t a luxury anymore – it’s survival.
Communicate Value: Customers might wince at price increases, but transparency builds trust. Explain the real costs behind the product and why supporting local businesses matters. When customers understand the battle, they’re more likely to stick around.
Resilience is Key: Whether you’re in food, retail, or services, resilience means finding new ways to deliver value while managing costs.
Innovation as Survival Strategy
For Parvizimotlagh and his team, innovation is the only way forward. “We’re here to deliver value, even when value becomes increasingly expensive,” he says. E.A.R.L. streamlined prep work, tightened negotiations, and, ultimately, had no choice but to pass some costs onto customers.
This kind of resilience is becoming the norm: 30% of small businesses are investing in automation and technology to cut labor and operational costs while keeping quality high. But innovation comes with its own price tag.
The Human Element
Behind every price increase is a story of resilience. For small business owners, it’s a daily battle to keep doors open, staff employed, and quality intact. While customers see a number, businesses see a fight to survive.
Parvizimotlagh’s words resonate: "Every sandwich is a choice. For us, it’s about survival. For customers, it’s about understanding the real cost of staying local."
A Call to Awareness
The next time you wince at a price tag, remember: You’re not just buying a product. You’re supporting a fragile ecosystem of local entrepreneurs waging an economic war against forces they can’t control.
E.A.R.L. continues serving East Coast classics in Honolulu – a delicious act of economic defiance. If you’re there, consider it more than a sandwich – it’s a statement.
E.A.R.L.’s Italian sandwich might cost more, but it represents the true price of keeping small businesses alive in a changing economy.