Inflation Putting Restaurant Operations at a Crossroads: What Can Owners Do to Combat Rising Costs?

The same issues affecting the restaurant industry and so many more are causing costs to rise for food manufacturers. Rising wages, material costs, transportation costs, and packaging costs are resulting in higher prices to restaurants. While regulators believe this is a temporary issue, what can restaurants do to navigate rising costs and an uncertain future?

Promoting More Profitable Items

Highlighting or suggesting menu items with a higher profit margin is a step towards combatting rising costs. It doesn’t have any impact on guest experience and will likely increase sales of profitable items. Whether it’s specialty cocktails or dishes with inexpensive ingredients, this can help reduce costs and increase revenue.

Scaling Back Menu

Eliminating menu items can be disappointing for customers whose favorite dish or drink was removed. However, this means less ingredients needed in inventory, less waste, and lower costs. Consider this option when specific ingredients are significantly more expensive, especially with less popular dishes and drinks.

Raising Prices/ Reducing Portion Size

The last option is likely to sour some guests but is an unfortunately necessary step in many situations: raising prices or reducing portion size. Many companies have had to do one of these from quick-service restaurants like Chipotle raising prices by 4%, to full-service restaurants like Texas Roadhouse raising prices by 1.4%, and consumer grocery products like Oreos promoting higher priced two-packs.

Rising prices are everywhere, and it may be necessary to continue to raise your prices. After dealing with the challenges of the past 18 months, it’s important to do what’s best for your business and remember that most guests would pay a few extra dollars to help keep the doors open to their favorite restaurant.