There’s no question that the recent period of record-breaking inflation has had a devastating impact on America’s restaurant industry. Restaurant owners are still struggling to combat inflation’s effect on their businesses including rising food and labor costs. So, what can an eatery do to reduce costs, retain customers, and still turn a profit during these tough times?
Below are some steps you can take to help your restaurant battle inflation.
1. Pinpoint What’s Important to the Brand
“In hard times, many companies tend to minimize marketing budgets or cut them altogether. However, this can actually be your best time for imagining your brand’s potential and vision.
This message rings true for restaurants. One of the most important parts of creating a resilient, inflation-proof menu is simplifying it. Figure out what your establishment is really good at and stick to producing that.”
2. Reduce Portion Sizes
“To keep you from making a dramatic price change to balance restaurant food costs, you can start by making your portion sizes smaller. Don’t go overboard. Clients should still be satisfied at the end of a meal, reduce them just enough so you can keep making a profit.
3. Make Creative Ingredient Substitutions
“Almost 75% of restaurant managers report food costs as one of their biggest challenges. If you can relate, it’s time to take a closer look at your inventory costs. Is there an ingredient you use a lot that’s seriously cutting into your bottom line? Maybe one of your best-selling dishes is great at bringing in revenue but it includes a pricey ingredient that’s impacting your profit.
Explore ways you can swap that ingredient for something less expensive and calculate how much you’ll save. Then figure out how you can do the swap in a creative way that maintains demand for the dish. Maybe Margarita Mondays feature a lemony twist on the classic or your signature salad comes topped with dried chickpeas instead of almonds.”
4. Reduce Food Waste
“Reducing food waste starts in the kitchen, and extends all the way to your budget and potential food inflation problems. If you can find ways to waste fewer cuts of steak, or keep complimentary bread sealed, you can hold onto fresh food longer. That way, you’ll have it on hand when you need it. “
5. Reduce Operating Hours
“Limiting your restaurant’s hours to combat inflation helps cut back on operating and staffing costs. Consider trimming available hours either first or end of the day to condense traffic flow to your most popular hours.”
Source: Charlotte Business Journal
6. Streamline Your Supply Chain
“The next area to look at for reducing costs is sourcing. Look across all your vendors and consider consolidating them. See if any offer a larger selection of goods and discounted pricing on bulk orders, especially if you operate multiple locations. For fresh ingredients, find out if it’s more economical to source them locally while being flexible with seasonal availability.”
“We are working on consolidating vendors and are trying to cross-utilize more ingredients across our restaurants so that we can increase buying power and bring costs down.”
–Jason Himber, MINA
7. Cut Costs Beyond Food
“Sure, food costs can eat into your profit, but there are plenty of spots to potentially save money as you look at the inevitability of restaurant prices rising to combat inflation.
● Takeout containers
These can be a big bottom-line expense, especially if you’re buying eco-friendly ones. Consider shrinking their size or reevaluating how you package to-go orders to maximize use of containers.
Cutting down on waste may help trim your waste management budget, but you can also make simple fixes like using energy-efficient light bulbs and opening doors for fresh air instead of running the AC constantly.
● Staff training
Whether it’s streamlining your kitchen by doing more batch prep and cooking to save time or making sure your servers know to ask about allergies and temperature preferences to avoid having to re-fire a dish, consistent staff training can help save money.”
Need Business Funding for Your Restaurant?
At First Union Lending, we are dedicated to helping this country’s small businesses thrive. We can get you access to a variety of business loan programs—from lines of credit to merchant cash advances to bridge loans. You don’t have to face inflation alone.
First Union Lending is invested in every one of our clients and ultimately, in their success. Call 863-825-5626 today to get started!