Zaro's Cafe, other Long Island businesses struggling to stay afloat amid rising costs, lower sales

Edmund Zarou, 33, is among the third generation to run Zaro’s Cafe in Huntington Station, a Greek and Italian restaurant established in 1993.

But after more than 30 years in business, the restaurant on Jericho Turnpike is facing economic headwinds from rising costs as customers tighten their belts.

“It’s a double whammy,” the Uniondale resident said. “We’re paying more for goods, we’re paying more for labor, we’re paying more for all the other stuff that you have to pay for. Then on top of it, people are coming in less or spending less because they’re tight.”

Zaro's is like many other small businesses on Long Island and around the country that are struggling to stay afloat as they also contend with the impact of inflation and tariffs, experts said. Further, beyond costs and foot traffic, experts said, small businesses are grappling with competition from big box companies and online shopping that offer prices and goods at lower costs and greater convenience than they can afford. 

Tariffs, inflation fuel rising costs

Rising costs started with pandemic-induced inflation and have continued to rise with tariffs and the threat of tariffs, said Ree Wackett, senior business adviser at the Stony Brook Small Business Development Center.

In early August, the average effective tariff rate climbed to 18.6%, the highest it’s been since 1933, according to the Yale Budget Lab, a nonpartisan policy research center.

The region also has experienced around 23.6% in cumulative inflation since 2019, according to in2013dollars.com, a site that measures inflation. That means the buying power of a dollar in 2019 would be equivalent to around $1.24 in 2025.

Nearly a third of Long Island businesses fell short of meeting their projected business expenses in 2024, with most citing inflation and rising payroll costs as the reason, according to a 2025 survey of 118 Long Island businesses conducted by the business group HIA-LI, Adelphi University and consulting company Citrin Cooperman.

Many small businesses are grappling with higher costs for supplies and labor, tighter sales and repaying pandemic loans, said Joseph Garcia, vice president at Nassau Council of Chambers of Commerce. "I really look at it as a triple play, and not in a good way for a lot of these small businesses." 

Many small business owners have come to Stony Brook's development center, which typically works with more than 1,000 businesses a year, seeking advice on how to cut expenses without compromising quality, Wackett said.

‘Main Street competing with Wall Street'

Many business owners also are competing with big box stores, which can afford to offer lower prices than small businesses, Wackett said. “It’s Main Street competing with Wall Street.”

Frank Cosentino, owner of County Line Hardware in Huntington Station, said online shopping has posed a huge challenge to businesses. His store, established in 1985, has survived because of the level of service and specialized goods it offers, he said.

“As a legitimate retailer, I can find things cheaper on Amazon than I can even buy directly from manufacturers,” said Cosentino, who is also president of the Huntington Station Business Improvement District.

Like Zaro’s, Cosentino's store is facing rising prices, such as a 15% increase on nuts and bolts that the manufacturer has attributed to tariffs, he said. His shop also has invested hours of labor to manually update price tags on products.

“When I first opened up, it seemed like you couldn’t help but make money. And now, it’s like, geez, if you look at your bank account, you’re like, ‘Where did all the money go?’” he said.

At Zaro’s, costs for everything are up, including chicken — up around 75% from 2019 — and tin foil, Zarou said.

“A case of tin foil used to be like $40 to $60. Now it’s like $180. We go through three cases a week,” he said. “Every single thing is up. I don’t think there’s one item that is not up, and up by a significant percentage.”

Businesses seeking solutions

In an effort to increase foot traffic, Zaro's has lowered the price of gyros, their most popular offering, to $10. Zarou said he hopes to increase sales to make up the cost.

Recently, the cafe also coordinated with Legis. Rebecca Sanin (D-Huntington Station) to draw community support with an event that generated the equivalent of two full days of sales in three hours, according to Sanin’s office.

“So many of our small businesses are really struggling,” said Sanin, who regularly meets with local business owners.

Part of the problem is online sites like Amazon can deliver goods at lower prices for minimal effort, she said. “You can lie on your couch and click a button and have what you want at your door the next day at a price that’s lower than leaving your home to go to a small business.”

She’s been working with Adam Haber, co-founder and CEO of Trellus, as a way to help combat this, she said.

Trellus is an online delivery platform — also available as an app — with around 125 local businesses in Nassau and western Suffolk, Haber said.

The idea is to create “an environment where a small business can now beat Amazon at their own game, where they can offer on demand, same day ordering and delivery for Long Islanders,” he said.

And, while small businesses can’t slash prices to match those offered online or at big box stores, there are other ways to draw in customers, Wackett said. Some examples include offering superior customer service and loyalty programs, and running seasonal specials and social media campaigns.

There’s also a state bill that could help small business owners, if passed, said Robert Fonti, chairman of the Suffolk County Alliance of Chambers, who has advocated for the law for years.

The proposed legislation would allow businesses with 25 or fewer full-time employees and net annual incomes below $250,000 to contribute to tax-deferred savings accounts, with the ability to make tax-free withdrawals during state-designated periods of economic hardship, according to Justin Littell, senior legislative director for New York State Assemb. Steve Stern, who helped sponsor the bill.

Depending on how many businesses opted in, the program would cost approximately $20 million, he said.

Supporting local businesses

Experts highlighted the value that small businesses bring to communities, especially on Long Island, where around 90% of businesses are small, according to the Long Island Association business group.

Nearly 275,000 people on Long Island are employed by private businesses with fewer than 20 employees, according to state data, and local businesses with between 20 and 49 workers employ more than 123,000 Long Islanders.

Plus, the money “spent on Main Street stays on Main Street,” Wackett said, citing a 2022 study from American Express that found 68 cents of each dollar spent at a small business stays in the community.

At the event to support Zaro’s earlier this week, customers highlighted their desire to support the restaurant and other local businesses.

Small business owners are “our neighbors. They’re the folks who support the Little League teams and the school play,” said Joan Baim, 45, who often visits Zaro’s Cafe with her family, where her favorite dish is the Greek salad with chicken souvlaki.

"We want to keep it alive,” the Huntington resident said.