Anyone in the food industry knows there are some pretty intense challenges facing owners these days. Wages, food supplies, equipment, and maintenance all cost more, customers are concerned about the pandemic, commission-based third-party services have eaten into already-small margins, and staffing is at an all-time low.
We’ve heard some restaurant owners say they’ll just “wait out” the rising costs, or see if they can make do without changing anything because they don’t want to upset customers. But there are definitely things you can do now to alleviate some of these concerns.
- Raise Menu Prices.
Margins are tight, and they get tighter every time one of your food suppliers raises prices on you. Your customers are paying more at the grocery store than they were before Covid hit, so they already know food prices are going up. With no immediate end in sight, the wisest thing you can do is raise the prices on your menu. Your customers obviously won’t love it, but they will likely understand. You may even want to incrementally increase prices by less than a dollar until your margins are keeping your business profitable. The bottom line here is that undercharging your customers just because you think that’s what they want is not a wise way to run a profitable business.
- Find New Suppliers.
Using local or renewable sources for your food products is a great way to save some money and increase profits. If you’re in an area where locally-grown food isn’t available, do some serious research on where you can get what you’re looking for cheaper.
- Add Surcharges.
If you just cannot convince yourself to raise your menu prices, another option is adding a surcharge to orders. In areas where inflation is especially bad and laws implementing high minimum wage requirements are prohibitive, surcharges aren’t a surprise, either. We’ve heard from some restaurant owners that none of their customers have complained about added surcharges, understanding the necessity of it.
- Adjust Your Menu.
When your margins are tight, one of the most obvious things to do is re-work your menu. Remove items with the lowest margins, combine best-selling items with low-selling but high-margin items into bundles, add new items that might sell better that are more cost-effective, increase categories on your menu that might appeal more to your local audience, and find alternatives to items that are expensive or hard to obtain. Before making any radical changes, though, make sure you know what your customer base actually wants, and don’t just guess. It’s really easy to guess wrong and turn a big problem into a catastrophe instead of a solution.
- Reduce Waste in Your Process.
This doesn’t just mean not wasting food, although that’s important, too. Use every part of your food supplies that you can. However, there’s a lot more to this; you’ll also want to trim processes, protocols, and procedures that otherwise soak up a lot of time and energy that could easily be spent elsewhere, in ways that will more meaningfully help the business.
- Automate.
While you’re streamlining the day-to-day way you run your business, don’t forget to leave your staff open to what your customers need by removing menial tasks that could be done by software, computers, or other automations. Of course, we recommend that you reduce phone time by using Reachify – a call deflection technology that sends your customers text messages when they request certain options from a fully customizable call menu.
- Focus on The Experience.
People – especially younger generations – are willing to pay more for an experience. You can raise your prices successfully if you offer a unique and customer-centric experience in your restaurant. Don’t forget that your customers are about more than just what they’re eating; they want to buy something delicious from a relatable person who makes them feel good.
