Food prices have risen dramatically over the last 18 months as restaurants continue to struggle during the pandemic. Most operators have probably raised prices once, if not two or three times, to keep up with these costs. And this, of course, trickles down to the consumer.
All of this is particularly challenging for the independent restaurant owner and operator, whether they are running one or two locations or a small local chain. They just don’t have the resources or the purchasing muscle of the larger corporate chains.
But…what they do have right now is an unprecedented level of consumer goodwill. In fact, as Lee Schulman, founder of Panacea Management Group Consulting puts it, “More of it than I have seen at any other point in my 30-plus-year career in restaurant operations. People will normally put up some resistance when prices increase, whether during their visit or simply by not coming back. But that is not what is happening.”
Most customers today understand and are sympathetic to the problems that the smaller, independent restaurants are facing, and they appreciate the experience of dining out on a different level than they did two years ago. They read the news, and they see other restaurants closing their doors because of the pandemic.
So this is a unique opportunity. If ever there was going to be a time when customers are forgiving of, and even expect, a rise in menu prices, this is that time! They want their local restaurants to succeed.
This does not mean that a restaurant can just mark everything up 5%, 10%, 15% or more and call it a day. Customers need to know that the restaurant is doing all that it can to minimize the hit on their wallets without resorting to serving an inferior product!
In this current climate, therefore, it’s essential that operators establish and maintain a good line of communication with their vendors so that they have a heads-up when prices are about to go up and can quickly source that alternative cut of meat or whatever is needed to avoid an interruption. It is far better to offer a slightly revised menu item than to have to apologize for not having a customer’s favorite.
In short, what you do behind the scenes is just as important, if not more so, as whatever markups you end up adding to your menu. Customers are going to notice…and will continue to reward your efforts with their business.
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