It’s true that consumers won’t totally stop visiting restaurants, but they will cut back on their expenses on restaurants meaning that restaurateurs must take action to protect their income and profitability.
While it’s not the easiest task to perform, you may rest assured that it’s manageable especially with restaurant management software along with its integrated features.
How to protect your profitability during food inflation?
Create ingredient substitutions
Your food costs are the biggest issue and challenge. It’s advisable to run an inventory check on your food costs and swap some of the costliest food you have. Swap them for seasonal and local food that are usually less expensive.
If the substitution is noticeable then make sure to announce it with appropriately on the menu or on specials. If not, then never mind.
Switching nuts for loess expensive ones, swapping vegetables or fruits in salads and desserts. You have many options to substitute items but make sure that you review your data from the inventory management system and menu engineering that show you the most expensive items and the most profitable and popular items.
Think strategically about your specials and limited time offers
Your specials include all free items that the customer receives while ordering. If customers only order specials without adding regular meals, you should reconsider making up your margin with your discounted items.
You should pair combo meals that include low and high profit margins, consider lowering discounts or prepare smaller portions or substitute items in meals.
You might even get creative with your recipes and create a day or night for an exclusive dish with high profitability driving sales up.
Reduce food cost
Food waste is accountable for 35% of total food costs. Knowing this, you should dig into your inventory numbers to see the area where you’re losing money the most. It maybe the portioning of your plates or the waste in preparation or in expired or spoiled items.
If your customers are not finishing their dishes, you should consider decreasing your portions.
If you notice that you have lots of spoiled vegetables at the end of the day, you should reconsider your purchases.
Having an inventory management system is essential here to monitor your food and how it gets used.
Use menu engineering
Identify your different menu categories (stars, plowhorses, puzzles, dogs) to assort them according to their profitability and popularity. Thank God you don’t have to do the math here if you have menu engineering feature integrated in your POS software.
You may want to promote some of the high profitability items, remove low popularity and low profitability ones or decrease the cost of certain dishes with high popularity.
It’s also the time for your talented chef to get creative with low-cost recipes that are high in demand or that you know they will be popular.
Understand price barriers
While you should increase your prices, you have to realize that customers are usually reluctant to cross certain prices barriers. Be aware of these barriers so you don’t lose customers.
Instead of rushing to increase these prices, rework your portions or substitute one of the ingredients.
Food inflation is an issue for restaurants and consumers but there are always ways to get through this inconvenience with the least losses.