Restaurants Respond to Inflation with Price Increases
Inflation has crept to double-digits this year, with forecasts for further rising due to multiple national and international concerns. Several weeks ago, we discussed the toll this is taking on consumers who might opt out of restaurant dining to compensate for an increased cost-of-living. Now, restaurants must focus on their own business models and expenses and determine how to adjust for price hikes.
Many restaurant owner-operators are opting to raise their menu prices to accommodate increased costs and supply chain issues. Nation’s Restaurant News reported that Shake Shack would raise prices by as much as 3.5% this spring, and that Bloomin’ Brands, parent company to Outback Steakhouse, would jump as much as 5%. Cracker Barrel reported as much as 6% increases before the end of the fiscal year. “The Lebanon, Tenn.-based casual dining chain raised menu prices roughly 5.3% during the Jan. 28-ended second quarter, which reflected more than 2% in pricing from fiscal 2021 and more than 3% from a price increase in August. The increases helped offset the impact of 8.5% commodity inflation and a 10.8% increase in hourly wage inflation during the quarter,” reported Nation’s Restaurant News.
National Restaurant Consultants are experts in menu development and business plans, navigating the economic and budget issues restaurant owners face before settling on menu prices. Our free consultations may quickly determine where your immediate needs are and how they should be addressed.
Richard Weil, principal and owner of National Restaurant Consultants, explains,“Raising menu prices is never an easy decision. And uniform price increases across the board is not the ideal solution. Though there is a sense of urgency, menu engineer—take the time to look at your product mix, the margins on your top 15-20 items, and then increase the prices on menu items that will give you the biggest bang for your buck.”
Contact National Restaurant Consultants—our consultants are experts in menu engineering and working with product distributors.