3 Ways Foodservice Can Hold a Competitive Edge Against Home Cooking

More so than what typically happens in rough economic times, consumer behavior during this wild post-pandemic era has been intriguingly unpredictable.

Earlier this summer,?Restaurant Business, citing a Morning Consult survey, reported that “more than 80% of U.S. consumers said they were eating out less often as a result of inflation.”

But, since then, a funny thing has happened.

The grocery price swell has consumers taking another look at foodservice—still spending 40% of their food budgets on restaurants—because the out-of-pocket gap between the supermarket and the sit-down is virtually zero. In that scenario, foodservice looks rather enticing against the cooking and cleaning chore of making meals at home.

This isn’t to say restaurants and c-stores can coast through this economic storm, however. Inflation pressure is still in play in the foodservice market, influencing consumers to be more selective about?where?they eat and what to order—which means it’s time to think strategically.

Here are 3 ways operators can shift in the face of unusual challenges and leverage this inflationary fiasco into an opportunity.

1. Plan a Foodservice Menu That Can Flex

From?winning the kitchen labor battle?to?maintaining takeout & delivery food quality, keeping the menu simple has been a recurring recommendation in this blog.

Today’s inflation scenario, driven largely by supply frustrations, is yet another reason.

Plan menu items that can be flexible with regard to ingredient substitutes and per what’s available, with consideration for seasonal items and local sources (the latter of which really resonates with consumers—so, promote them when you can).

Also, square your menu with consumers’ price-inspired ordering preferences.

For example, according to the same?Restaurant Business?report, “72% are purchasing less meat and 68% less alcohol” because of inflation.

If you haven’t already explored and expanded into more plant-based items, this is the time to do it. Most consumers are flexitarians (y’know, a hipper word for omnivore), who are now even more open to meatless meals because they’re cheaper.

With a little more strategy,?plant-based can be cheaper, but still very profitable.

2. Give Foodservice Customers What They’re Paying For

That means preparing fresher foods to call the bet of grocery stores and home cooking for their ‘fresh’ perception advantage. But then, raise the stakes by leveraging your own advantages in foodservice.

In other words, innovate. And keep innovating. Even if it’s just an LTO ingredient twist on an existing top seller.

It’s the new ideas and mastery of taste that, beyond the aforementioned cooking and cleaning chore, really give foodservice a tractor-beam draw against the alternative.

Likewise, another big draw is the service. Find ways to?enhance your customer experience offering—which, again, with a little more strategy, can even be done in a labor crunch.

3. Do Whatever It Takes to Hold the Line on Price

With the closing of the cost differential between groceries and dining out comes a temptation for operators.

In?a very recent interview with Barbara Castiglia, executive editor and host at Modern Restaurant Management,?Market Scale?cautions operators?to “be weary of creating a counter-narrative to that shrinking gap by raising prices either to boost profit margins or to try to combat rising producer-side prices.”

Instead, this is the time to whittle away the input and operational costs as much as possible.

Make and uphold efficiency commitments in labor, energy and procurement. And get creative with food usage, adopting more stem-to-root and tip-to-tail techniques, while exploring ways to optimize shelf life. For example, look at?fresh vs. precut produce, food holding with moisture and advanced solutions in rethermalizing.

If you can hold your price and stretch your margin on the operational side to offset supply-side costs, even a little price edge can prove to be a big deal against home cooking in this highly competitive inflation environment.?