High food costs continue to impact restaurant operators’ bottom lines. Even though overall inflation has been easing and foods purchased in grocery stores have been costing less than those offered at restaurants, restaurant costs (and many operator expenses) remain high. As a result, consumers may be giving menu prices some extra scrutiny right now — or skipping restaurant meals altogether. In fact, a recent report from AlixPartners found that instead of trading down on restaurant food, consumers have been cutting it out in an effort to protect their budgets. So it’s important to ensure you’re reaping the most benefit from the items you offer. There are a number of actions you can take. You may already be reducing portions and shrinking your overall menu size, and while this is helpful for waste reduction and cost savings, it also leaves room for guests to add to their dish. Play on their desire for customization by offering a selection of ingredient add-ons and side dishes that guests can add to their meal that incrementally increase the price of a dish without giving people sticker shock. Make the most of the sales you get by engineering your menu so its layout naturally leads the guest’s eye to items that generate the most profit for you (and cost your menu so you are well aware of what those menu items are). Finally, lean on other streams of income. Retail items and licensing opportunities may help you generate sales in the background and allow you to smooth out dips in your sales of menu items.
Supply challenges could persist for the remainder of 2022 and into next year, according to the prevailing commentary from restaurant industry analysts. Consumers are well aware of the shortages and are experiencing them at grocery stores themselves, along with higher prices as compared to restaurants. But with a little planning, you can entice guests to order from you and avoid reminding them of the inventory (and staff) you may lack week to week. Now is a good time to develop a contingency plan for the year, to cover recipes, ingredients, promotions and equipment. First, scrutinize your recipes and look for ways to flex them with a range of ingredients – swapping in different vegetables, grains, sauces and spices, for example. For each dish, have a roster of back-up ingredient options that you can turn to if a key ingredient isn’t available. Be able to make quick adjustments to your physical and online menus based on your supply so guests aren’t in the position of ordering an advertised dish only to be told it’s unavailable. This is yet another year when operators will have to do more with less, so consider how you can serve guests in a way that is as resource-efficient as possible (and then incentivize guests to support you in that way). If you want to elevate your takeout business to ease the burden on your staff or manage better with a skeleton crew, for example, you could offer a discount when guests submit an order for collection before 5:30pm – or whenever your dining room normally begins to get busy. Finally, look at your cooking equipment and try to forecast what is likely to need a replacement or repair. Then, look to simplify your preparation and menu so you aren’t so heavily reliant on individual pieces of equipment that could let you down and take extra time to be repaired or replaced.
As Covid-weary diners flock to dining rooms and short-staffed restaurants struggle to meet the demand, some operators are shutting off less profitable streams of service (like delivery) during periods when they couldn’t otherwise manage all of them at once. The Wall Street Journal reported recently that Applebee’s, Olive Garden and IHOP were among the restaurants choosing to shut off online orders at specific times. This capability, if you don’t have it already, is one to consider implementing this year as part of your tech toolbox. Going forward, there may well be times when you need to scale up and scale down order streams at the flip of a switch. Being able to handle those transitions smoothly – and also marrying those actions with corresponding offers designed to attract guests to your other service areas – can help ensure a steadier flow of business.