THE DO'S AND DON'TS OF RAISING RESTAURANT MENU PRICES

From food to gasoline, packaging to labor, climbing restaurant costs are shrinking margins from tight to razor-tight. Raising menu prices is now an inevitable part of doing business. But while that solution might seem obvious, how to execute isn’t always as clear.

So what’s the best way to go about it? We break down what to consider when changing what you charge.

Don’t: Wait to raise prices when it’s needed.

Watch the market, assess your margins, and adapt prices accordingly – that’s always been good business protocol. But with inflation and today’s supply chain challenges, it now needs to be part of your monthly, if not weekly, routine.

The smaller the margins, the less room for error, and time between sink or swim. If you see your food costs increasing beyond that 30%, don’t hesitate in re-evaluating your menu.

Don’t: Blindly raise menu prices across the board.

Menu management isn’t a game of darts. No part of the strategy involves throwing out a few price spikes and seeing what sticks. Rather, success comes from assessing concrete data – data that should already be available at your fingertips, i.e., your menu mix.

Do: Keep a close eye on sales per item after a price increase.

Raise the price of an item too high, and sales could drop in a way that negates any benefit. On the other hand, if you aren’t seeing much change in your customers’ ordering behavior, this could indicate there’s room for additional future increases. Pay close attention to the numbers, and you can make the necessary next steps.

Do: Be transparent with customers about why prices are rising.

It’s a saying for a reason: honesty is the best policy. If a guest questions the price, be transparent about the changes. Trying to hide price hikes often backfires, creating a feeling of mistrust among customers.?

Don’t: Add a surcharge to the check without a clearly attached explanation.

Planning to add a surcharge in lieu of raising individual menu prices? You must inform guests upfront.?

Do: Prepare front of house staff with talking points.

As with customers, educate staff on why you’re raising prices and give them the go-ahead to share that reasoning. You want them confidently fielding questions from customers who missed your signage, social media posts, or other explanatory memos you’re already pushing out.

Do: Time your price increases roll-outs strategically.

If you need to raise prices, you shouldn’t delay. But if you can tie it into a menu rollout, that’s ideal.

When possible, also time price roll-outs for a weekday to give staff time to get comfortable with the changes before busier weekend shifts arrive.