How upcharges on menus can help with soaring food costs

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Skyrocketing food costs are making it hard for restaurants — who already run on slim margins — to remain profitable amid a challenging business environment.

On one hand, restaurants can’t always absorb the increases in foot costs — but there is also the risk of alienating customers if those hikes are passed along in the form of higher prices.

Some restaurants are simply raising prices in line with what their food costs are, though with a volatile supply chain and market, even this can be tough to do because further fluctuations in prices could make it necessary to change prices again (having a contactless digital menu does make it easier to change prices as need without having to reprint menus).

Another option is to look for ways to start offering appealing add on ingredients that let customers customize dishes for a small extra charge. In some cases, this type of strategy can help tip the scales in your favor as a restaurant owner. Check with your culinary team on suggestions for what types of items are on trend and in demand — though you’ll also want to consider sourcing the product during the challenging supply chain scene that 2021 is seeing.

Of course, another way to keep prices the same but not give away food for free is to adjust food portions and quantity. For example, cutting back protein sizes by just an ounce or two can help offset price increases on this items — though just be sure to update your menu with any new weights so customers know what they are getting. Along these lines, you could offer the option to upgrade to a larger portion for an extra fee. With some strategic pricing, guests could end up opting to spend a bit more to get more food while, behind the scenes, the upcharge is favorable to your food cost ratios.

With overall challenges with sourcing ingredients, it could also be a good time to explore editing menu items to remove a few ingredients, especially if they are hard to source. For example, a sandwich topping might be removed if your culinary team thinks it won’t affect the overall flavor. Yes, this might mean a bit of a change to your guests’ experience, but it doesn’t do anyone any good if you don’t even have all the ingredients on hand when someone orders it.

If you’re still able to get an ingredient that your culinary team thinks could be made optional or it’s still readily available but just at a higher cost, considering making it an upcharge add on as well. This way, customers looking for the “original” dish can still get it but by paying enough for you to keep your costs in line while others might not even notice the change.

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