It’s no secret that many costs have gone up in recent months. Amid rising gas prices, labor constraints, and rent, restaurant owners and F&B operators also had to face rising food costs by about 25%.
These increases have also put some pressure on consumers, which has resulted in the restaurant industry's slowdown. It’s clear to many restaurateurs that customers are spending their salaries more on daily necessities than eating out at restaurants for lunches and dinners. Here are 4 ways to manage rising food costs.
Modify your menu
Some ingredients have seen their costs multiplied in the past few months while others have not been as impacted by inflation. Review your menu to identify the items and ingredients that have the most impact on your cost and try to replace them with cheaper equivalents. You can also offer popular main dishes with less popular sides to help move items that aren’t ordered as much. This will help you renew your menu and give your customers variety while helping you limit the impact on your business.
You can pass on some of the costs to your customers. The price increase should be limited and you should also offer value meals to provide customers with good value for money. To maintain the highest quality, a lot of restaurants will need to adjust prices, but recent surveys show that customers will continue to enjoy the products they love. You can also reward loyal customers with cashback which will limit the impact of price increases for them and drive them to come back to redeem their balance.
Challenge food suppliers
While it might sound contradictory, now is a good time to challenge your food supplier. Don’t hesitate to reach out to new food suppliers for your most popular and your most expensive items. That way, you will be able to make sure that the price increase is fair and aligned with the market. It will also help you get a better understanding of the price/quality ratio of your products.
Improve operations by investing in technology
Restaurant owners need to work their hardest to operational efficiencies while prioritizing staff retention. Incorporating new technologies can help reduce costs over time. How can you serve more customers without having to hire more staff? QR code ordering and payment can help serve more customers, and capture more revenue while making customers more satisfied. Do you want to start your delivery business but can’t afford to pay food aggregator commissions or bare the cost of your own drivers? Technology like ChatFood can get your e-commerce site set up in a few days and with our exclusive Careem integration, only pay for orders that get delivered. Get more business, and manage your costs!
While the inflation rate is not expected to slow down, these tips should help you contain the impact of rising costs on your business and preserve your margins.