This edition of MRM’s “Ask the Expert” features advice from Buyers Edge Platform. Please direct questions to Barbara Castiglia, Editor-in-Chief of Modern Restaurant Management (MRM) magazine, at [email protected]
Restaurant menu prices continue to rise, with the US Department of Labor reporting an inflation rate of 7.5% on an annual basis. These rising inflation costs are impacting all industries, restaurants being no different. Traders are forced to make changes in an effort to navigate escalating prices.
Restaurant and foodservice operators are feeling the pressure as Technomic reports that food and beverage costs have skyrocketed 13% over the past two years, while paper and packaging are up 11%. Technomic also reported that 45% of consumers say they usually choose restaurants with lower prices. But with food and supply costs rising, how can operators keep menu prices low when they have to pay more for inventory?
Run OLTs to reduce food waste
Do you have fruit that is nearing its expiration date or meat that is about to spoil? Did your weekend go a little slower, leaving you with extra ingredients you hadn’t anticipated? Try creating a Limited Time Offer (LTO) that uses your soon to be discarded ingredients. There are multiple benefits to reusing ingredients and it creates an opportunity for your chef to create something new and inspiring. By prioritizing food waste reduction, your restaurant positions itself as an eco-friendly operation and you spend less money replacing those expired and wasted products.
Use value-added ingredients
According to Technomic, 24% of operators are increasing their use of value-added products. Switching to ingredients that can generate higher revenue and bottom line is one way to mitigate rising costs. Having the ability to bring a sku that has multiple uses is a great way to maximize the use of that product and achieve greater success. Value-added products promote quality and consistency and can even help overcome labor challenges.
Focus on the cost side of the profit equation
The restaurant industry is rapidly entering the age of technology, and more and more restaurants are taking advantage of improved restaurant metrics and reporting, such as food cost management technology. Sometimes savings are not so easy to find. With the naked eye, there is no way to have full visibility of your purchases. Using sophisticated technology and data tools can help you uncover areas where you are losing margin due to high costs.
Reducing your food costs without sacrificing the quality of your menu items is vital to the survival of the restaurant industry. But customers can be sensitive to change, especially when it comes to the price of their favorite plates. It’s a tough time for traders right now and inflation doesn’t seem to be improving any time soon. Even if you’re forced to increase your menu prices, there are plenty of ways to manage the increase and keep costs low. Whether you’re running LTOs to use up leftover ingredients, use more value-added products in your recipes, or take advantage of food cost management technology, you can manage menu price inflation without changing the quality of your recipes. .