The world is not merely watching Russia invade the Ukraine—leaders are taking action. Included in aid to the Ukraine and multiple sanctions against Russia, President Biden has banned all Russian oil imports. With the world market accounting for these restrictions and uncertainty, prices are on the rise in the midst of already high US inflation.
Stocks are falling and oil prices are rising, as Nation’s Restaurant News reports, and it will be affecting businesses—including restaurants—in no time. In order to stay on top of profit margins, restaurants should adjust menu prices immediately.
With this in mind, it is crucial that restaurant owners take immediate, cautious action. Prices will be on the rise across all industries. So, while menu prices will need to be adjusted to compensate for increased expenses, owners should be careful not to pass all of the costs on to consumers who may be less willing to spend.
National Restaurant Consultants CEO Richard Weil offers this advice for price adjustments. “While the media is relating increased caution to pricing, the fact is, the food service and hospitality industries have traversed through closures and restrictions for two years already. With food costs, beverage costs, cost of freight and labor all rising with double digit increases in the past six to twelve months, restaurants should, at a minimum, be above 15% (from August 2020) to keep pace. While passing pricing increases to consumers is never an easy undertaking, the necessity for near- and long-term survival is paramount. Stay with the curve, not behind it!”
Our restaurant consultants’ cost analyses always takes world events and the global economy into consideration. Utilize our expertise to ensure that your menu prices and expenses are matched to the market climate.