Restaurants focus on cost control efforts

KEEPING COSTS IN line has always been a survival imperative for restaurateurs, but the economic environment of the last several years has made such efforts more critical than ever. Labor shortages have driven up wages, while supply chain disruptions, natural disasters, and war in Europe have led to double-digit upticks in the cost of food and supplies. Dramatic increases in wholesale food prices are particularly troublesome for eating establishments, since the cost of food typically accounts for a third or more of the overall cost of a restaurant meal.

Coping with such unrelenting cost pressures was the topic of a recent webinar presented by Nation’s Restaurant News, a major restaurant-industry media outlet. The session, “Menu Economics: Navigating Food Inflation” focused on managing menu costs, and its central message was a simple one — restaurant owners need to now, more than ever, be proactive when dealing with costs.

Restaurant owners and executives, the program’s participants agreed, need to start their cost control efforts by paying attention to what’s going on in the world and gauging the likely impact of those developments on food supplies and prices. Waiting until prices have actually gone up is too late.

Simply adjusting menu prices is not the way to deal with cost increases, either, since consumers, hit by similar inflationary pressures and seeing their disposable incomes shrink, are becoming increasingly price sensitive. Instead, those participating in the webinar shared some practical solutions for dealing with food cost pressures. Using frozen foods rather than fresh where possible was recommended, for instance, since the cost of frozen foods

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tend to be more stable. Reviewing recipes to identify cost-saving ingredient substitutions was another strategy suggested, as was taking a hard look at the number of items on an operation’s menu overall and reducing that number to the extent possible.

Strategic marketing is another piece of effective cost mitigation. Restaurants need to identify menu areas where raw product costs are likely to be an issue and then tweak the operation’s marketing efforts so as to channel demand away from those dishes most impacted by rising wholesale prices.

The webinar “Menu Economics: Navigating Food Inflation” is part of the Emerging Restaurateur Live