Restaurant Terrorism

High shipping rates, delays and increases in grain costs have sent food prices soaring for restaurants already hurt by pandemic restrictions and closures. So, when you think things couldn’t get worse for restaurants after two years of restrictions, the plot thickens. With much lower than marginal sales, limited seating, and new covid19 measures…it just seems to be getting worse. Now add to that the rising cost of labor due to shortages of skilled staff and rising food costs and supply issues.

Have a look at the inflation index; https://tradingeconomics.com/canada/food-inflation

What to do? The labor issue I have discussed before in a previous blog. As for the cost of food issue, let’s have a look. Assuming you have proper control measures in place, the steps are simple.

There is no magic silver bullet to fix this challenge. Customers come to your business for many reasons, loyalty and trust are just two of them. If you have done everything to keep costs in control and provide the best possible menu items, then it is time to look at changing your prices. Any prices changes (increases) should be done with the utmost care.

If you are considering increasing your menu items by dollar values, such as an increase from $10.95 to $11.95, be careful, your guests will definitely notice. Instead, consider using small incremental changes to your prices: a $.25 increment is less likely to be noticed than an increase of $.95.

If you have items that experience a high amount of price volatility, consider listing these items at “market price”. This is a great alternative for seasonal items like seafood that may experience highly changeable prices for the raw product. 

Keep your prices the same but decrease your portion sizes. Start by inspecting the ‘finished’ plates coming back from the dining room. If you find that your guests are leaving large quantities of food left over, it’s likely worth thinking about this strategy.

Add value to the price increase, especially if the increase is significant. For example if you are selling a bowl of soup for $3.95, and you want to increase it to $4.95, add a roll or biscuit to validate the increase.

That’s it for today folks! Happy Hump day!!