June 7

Setting Restaurant Menu Prices With Rising Inflations


We know! Inflation is making everything more difficult right now. It’s different in the restaurant world, and dealing with the rising costs of labor and ingredients presents a difficult question for restaurant owners and managers. What is the best way to set restaurant menu prices in today’s inflationary market?

QSR Magazine recently published a detailed article on this topic. My purpose here is to summarize their ideas so that you can take action. You can read their article here: The Delicate Art of Menu Pricing | QSR magazine

Can we raise our restaurant menu prices?

While raising the prices on your menu is a legitimate option, there is one caution. Customers will only be willing to accept price increases to a certain level. We don’t know what that level is, but it is out there, so be careful when raising prices.

Another related tactic is to serve smaller portions for the same amount. The same caution is in place. Customers can see a change in portion size and will only accept so much before taking their money somewhere else. Be cautious with this tactic.

What are the best ways to manage menu prices?

Given the existing limits with increasing prices, a restaurant manager or owner should turn to some or all of these other strategies.

  • Eliminate menu items with low margins and/or expensive, difficult to procure ingredients
  • Identify high margin items and lower your margin expectation
  • Use kitchen technology to improve your restaurant’s efficiency
  • Look for menu items with a good perceived value, which may tolerate a price increase
  • Leverage technologies like kiosks, order/pay-at-the-table, etc., to reduce your labor demand
  • Use different pricing for various channels like mobile, drive-thru, and dine-in ordering
  • Leverage great hospitality techniques to increase the overall perceived value of your brand

After considering all those options, keep this final tip in mind. If you need to increase prices, do so sparingly. If customers feel like you frequently increase prices, they will get frustrated and stop coming. Consumers like consistency in pricing. If they feel like they can’t be sure what you’ll charge them from one visit to another, they will go somewhere else to eat.


Kitchen display systems, online ordering, POS, restaurant inflation, restaurant menu prices, Restaurant Technology, rss news

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