So, I’m speaking not as a restaurant owner but as an ice cream shop owner. Same issue, of course, but on a much smaller scale.
I had already decided in November last year to raise prices by 5% this year. I arrived at that number by looking at the sliding 12-month inflation trends and that seemed about right to me. Of course, my number didn’t care who was president or who controlled congress or whether or not our government even survives. It is just a cold, hard number that is based on facts. My high-season kicks starts ramping up in March, and new prices go into effect then.
Secondly, I print my own menus. This means that I can change prices whenever I want and don’t have to wait on printing companies or worry about the cost of commercially-printed menus. I have a costing and inventory spreadsheet that I update every time I make purchases of items, so it is always up-to-date and notifies me when it might be time to consider price increases. I hold off as long as I can, for obvious reasons, but eventually I determine that it is time. So I change prices, update my menu and print new ones. I have chosen not to inform customers about price increases. Those who care will say so, and my experience has been that most don’t even notice.
Honestly, I do not expect things to level out any time soon. Volatility and uncertainty are the new normal and we, as business owners, have to accept that and plan for that. I see absolutely no signs to hope that this process, whatever it is, will be quick or painless. I’m preparing for the worst and am not going to allow myself to be distracted by hope. I will do what I have to in order to pay my bills, keep my employees happy and make a decent profit. And if that isn’t enough, I’ll move on to the nuclear option and gracefully close up shop.
Anyway, the silver lining here is that inflation doesn’t seem to deter customer spending anymore. Even with egg surcharges, eggs are still flying off the shelf and onto plates. American consumers don’t seem to care. As long as that is a fact, I’ll keep my prices where they need to be, just as I’ve always done.
So, I’m speaking not as a restaurant owner but as an ice cream shop owner. Same issue, of course, but on a much smaller scale.
I had already decided in November last year to raise prices by 5% this year. I arrived at that number by looking at the sliding 12-month inflation trends and that seemed about right to me. Of course, my number didn’t care who was president or who controlled congress or whether or not our government even survives. It is just a cold, hard number that is based on facts. My high-season kicks starts ramping up in March, and new prices go into effect then.
Secondly, I print my own menus. This means that I can change prices whenever I want and don’t have to wait on printing companies or worry about the cost of commercially-printed menus. I have a costing and inventory spreadsheet that I update every time I make purchases of items, so it is always up-to-date and notifies me when it might be time to consider price increases. I hold off as long as I can, for obvious reasons, but eventually I determine that it is time. So I change prices, update my menu and print new ones. I have chosen not to inform customers about price increases. Those who care will say so, and my experience has been that most don’t even notice.
Honestly, I do not expect things to level out any time soon. Volatility and uncertainty are the new normal and we, as business owners, have to accept that and plan for that. I see absolutely no signs to hope that this process, whatever it is, will be quick or painless. I’m preparing for the worst and am not going to allow myself to be distracted by hope. I will do what I have to in order to pay my bills, keep my employees happy and make a decent profit. And if that isn’t enough, I’ll move on to the nuclear option and gracefully close up shop.
Anyway, the silver lining here is that inflation doesn’t seem to deter customer spending anymore. Even with egg surcharges, eggs are still flying off the shelf and onto plates. American consumers don’t seem to care. As long as that is a fact, I’ll keep my prices where they need to be, just as I’ve always done.
I am in Australia, but a lot of the same things are relevant.
I have had this business 7 years now, and between starting the business with less budget than I possibly should have, and Covid, I probably did almost as much cost cutting as possible. The main ones for me were cross-utilization of menu items (keeping the menu ingredients as small as possible, but keeping the perception of a large venue), and keeping down wastage. We changed some recipes, and also adjustments on how we cooked them (not adding cream to sauces until we are serving it). Basic things, but we found by doing as many basics as possible, every bit helps.
We also are better situated finance wise, which is allowing us to either buy in bulk, or swap to other suppliers that wouldn't service us when we were new. We are currently swapping Food suppliers, and may be swapping Alcohol suppliers. The food supplier looks to be around a $20k saving a year, so not insignificant.
Wages for us is just as important, or quite frankly more important as it's a touch more controllable. We have skipped some labour intensive menu items, ie we now get the butcher to crumb our chicken schnitzelss, in order to keep these down. Sometimes these upset me as you get less control, but you have to keep prices down. Staff get $32 (approx $20 USD) per hour M-F, and more on Sat, and more again on a Sunday.
In our off season we don't have enough staff at times, as for the week our wage bill is to high, but we never know when we are going to get hit, but that's hospitality life.
I have a very good relationship with my suppliers.
My protein comes from a small family-owned butcher who slaughter animals from family-owned farms. This gives us a pretty good edge, something other burger joints around us can't say.
I've also had the same Sysco rep for around 5 years and she always looks after us. If she notices something on our account is going to go up she lets us know and will suggest a similar product.
Unfortunately, being in Canada, we as a country have been pulled into the tRumps' economic-destabilizing-tantrums, but luckily, what produce we do buy from the USA does not face a tariff.
I love the new ingredient/recipe costing feature being beta-tested as it gives me up-to-date COGS, but its currently not accounting for modifiers.
Llike @ChickenRacer, we started with a lower budget than we should have and we opened on the back end of COVID and have felt like we have just been dealt blow after blow, but I also feel like this caused us to pivot recipes and suppliers back then so we were already in a slightly better position I guess.
We too print our own menus like @TheRealChipA so we can make on-the-fly menu adjustments. I update my menu costing sheet every time Sysco delivers, this sheet shows me each item's food cost with the suggested costing.
I have also just finished redesigning my menu following some menu psychology methods. I fed my original menu along with my costing spreadsheet into GPT and gave it the prompt
"Act as an experienced menu engineer with over 50 years of experience. Take a look at my menu costing and current menu and redevelop a double-sided a4 menu that follows menu psychology and engineering best practices to make a menu designed for maximum profitability"
I followed all the suggestions and when finished I fed the new menu into GPT again and asked it to rate the new menu out of 10 and what improvements could be made.
I also used GPT to do some competitor analysis and compared our costings to theirs and made some pricing adjustments.
We are watching the bird flu crisis carefully as we sell a lot of chicken products and are watching the price of poultry. During covid, we had to remove poultry from the menu altogether because it was just outrageously expensive.
