5 strategies to help restaurant owners navigate inflation.
November 9th, 2022 Reading Time: 3 mins
It’s been a tough year in the foodservice industry, no question about it. With inflation driving the costs of everything up, from food supplies to wages, it seems everyone is feeling the pinch one way or another. Luckily, we have some tips to mitigate the negative impact and protect those precious margins without having to make massive changes. The important thing is to have a smart plan of attack. Here are some strategies to put to the test.
1. Trim the fat off food costs.
When food costs are on the rise, your first instinct may be to raise menu prices. But before you do, see if there are ways you can streamline your food budget. For example, look for deals on seasonal ingredients (prices often drop once the harvest comes in). In that spirit, if you have the means, build relationships with local farmers. You may be able to cut a deal if you buy in bulk and pick up the food yourself to cut delivery costs. And speaking of buying in bulk, that’s another great way to save, especially if you have the freezer space to accommodate.
2. Trash food waste.
As food waste decreases, profitability increases — that’s the kind of math we like. While it may be difficult to eliminate food waste completely, there are ways to cut it down drastically, and it all comes down to awareness. Conduct a waste audit to find out how much food you’re throwing away — not just in the kitchen, but at the table as well. That way you can see what you need to buy more of and what you can stand to buy less of.
3. Maximize your menu.
Speaking of audits and food waste, this would be a great time to do a complete audit of your menu as well. Go over each item and ask yourself these three questions: How much does it cost to make? How easy is it to prepare? How popular is it (or not)? If there are items that aren’t selling on your menu, remove them entirely so you can eliminate the food and labour costs associated with them. Next, look for ways to swap higher cost ingredients with lower cost ones without sacrificing quality or taste.
4. Think beyond food.
As you know, there are all kinds of costs associated with running a successful foodservice business. Take a look at your delivery and takeout containers — are there ways to streamline your packaging? How about utilities? Could you swap in more energy-efficient light bulbs or use fans instead of air conditioning? You can also take a look at staff training. Though it may be a bit of an investment upfront, having a well-trained staff of 10 is much more cost-effective than having a less experienced or trained staff of 15.
5. Raise prices (but only if you absolutely have to).
You’ve streamlined your menu. You’ve reduced food waste. Your team is a well-oiled machine. Still need a little more help? The next plan of attack on inflation is to raise your prices. Because food inflation is affecting everyone, everywhere, this will come as no shock to guests. The important thing here is to do it strategically — stay in line with the competition and monitor the effects of your price increases (something you can easily do with a good POS system in place). By staying on top of your numbers, you can pivot as needed if something’s not quite working for you.
Whatever you do, don’t change everything at once.
Though people are generally pretty understanding about the climate we’re in right now, the last thing you want to do is make too many drastic changes all at the same time. For example, if you increase your prices after you’ve reduced portion sizes, guests may not be too keen on taking the double hit. Try making one change, then monitoring the results, and taking it from there.
With the right strategies in place, you can keep customers happy and feed your bottom line. Maybe even make a little extra profit while you’re at it.
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