Restaurants are getting creative with menus to cope with rising food costs

Long Beach Fish Grill Menu Board

Source: Jessica Dinglasan

Jessica Dinglasson, owner of Long Beach Fish Grill in Long Beach, California, Didn’t write “market price” on his menu.

But now the source of the halibut fish he has produced is more than ড 30 per pound, almost double what it was a year ago, and the 13-gallon canola oil he bought for French fries and crispy fish has risen from $ 19 to $ 42.

“I have to make a market price,” he said.

As food and labor costs rise, restaurants are making strategic changes to avoid new prints on new menus each week. But price increases can only help so much, especially since weekly changes in material costs mean frequent reprints. That’s where menu engineering comes in.

Analyzing sales data and food costs can help determine which restaurant menu items will be emphasized, which prices will be increased, and which offers need to be dropped altogether to optimize their bottom line. A smart menu design can highlight foods or beverages that will help customers return or work in the kitchen.

A slightly larger font or an eye-catching box, sketch or photo can quickly translate into dollars.

“To me, menu engineering is the layout of menus that makes the ordering process the most profitable for restaurants,” said Michelle Benesh, president of Menu Design Firm Menu Menu.

Price pressure

Shaun Willard, a menu engineering expert at Menu Engineers, estimates that diners spend less than 90 seconds sitting down after browsing the menu. This puts pressure on the restaurant to present the menu to the customers which helps them to order the food that they will enjoy the most, fast.

The restaurant industry has now been plagued by higher product costs for months now as restaurant food demand returns but their supply chain lags behind. Russia’s war with Ukraine has exacerbated the problem, with gas prices rising and global shortages of wheat, corn and soybeans.

“Inflation is not declining. I thought it would, but now the war is on,” Dinglasan told CNBC.

According to the Bureau of Labor Statistics’ Consumer Price Index, food prices rose 7.9% year-on-year. But not all menu items felt the same level of inflationary effect.

“Chicken has grown, but not like fish or beef,” Benesh said.

Inflation is not declining. I thought it would be, but now the war is on. “

Jessica Dinglasan

Owner of Long Beach Fish Grill

It binds seafood restaurants and steakhouses. The Ruths Hospitality Group, for example, is predicting its food costs excluding beef will grow 16% in its first quarter. Add the cost of beef to that equation, and Ruth’s owner, Chris, expects the price of its ingredients to be up 24% from a year earlier.

At the steakhouse, facing steep price tags, cost-sensitive diners can opt for a smaller cut of phylet mignon. So Benesh helps those restaurants to round out their menus so that customers are tempted to order more side or appetizers.

“Maybe veg or Caesar salad or potato or gratin features প padding on the bottom line makes a difference,” he said.

Matt Pekinin, co-founder of Shuckin ‘Shack Oyster Bar, a 16-location chain with restaurants along the east coast from Maryland to Florida. He now lists all of his seafood offers as market prices, such as the Long Beach Fish Grill. Seafood makes up about half of the chain’s menu.

According to Piccinin, some of Shuckin ‘Shacks’ menu items are leader in damage, like its crab balls. Crab prices have risen, and the chain does not want to pay all the costs to customers. Instead, it hopes that popular appetizers will attract customers to come back and buy other menu items that are more profitable.

Constantly evolving

Willard says almost all of his clients have reduced their menus in recent months to practice better inventory control.

When the price is high, it doesn’t make sense to buy an expensive item that is only used for a dish or decoration. Willard said a client has stopped buying pickles as a garnish because of rising prices.

A thin menu also helps in the kitchen, which can go with low cooking due to high labor cost or lack of labor.

Olive Garden’s parent company, Darden Restaurant, is a restaurant company that cuts dishes early in the epidemic and sticks to the technique.

“In terms of menus, we’ve made it clear that we like to cut back on menus and what has been done to provide our guests with the high-value meals of their choice and make it easy for our teams to make them,” said Darden COO and incoming CEO Rick Cardinas Told analysts. “And we keep getting better. If we add a new item, we close the other item.”

The largest restaurant chains can better manage inflation, including strategic price increases and hedging with futures contracts that allow them to buy their ingredients a year in advance.

Bank of America Securities analyst Sarah Senator wrote in a note to clients last week that food inflation is the macroeconomic factor that is most closely linked to the growth of industrial one-store sales.

“As food prices rise and fall sharply in grocery stores, small increases in restaurant prices are relatively less difficult,” Senator said. “As a result, we believe that companies with inflation will be able to go through cost-effectiveness effectively, while those with lower prices will be able to gain traffic shares.”

However, this does not mean that universally traded restaurant chains are not even thinking about what is on their menu. Scott Bottwright, chief restaurant officer at Chipotle Mexican Grill, said in a February interview that the chain was trying to think strategically about limited-time menu items.

“We are thinking about the impact of future limited time offers and margins, looking at the supply chain, specifically for products that we know will see significant inflation and those LTOs will have to balance at least margin or even margin growth.” The boatman said.

And as the menu continues to evolve, some epidemic changes in consumer behavior are offering restaurants more flexibility and a cushion on their bottom line.

Many grocery stores have switched from physical menus to digital QR codes that point diners to the online version – no need to delete or discard the physical menus after each use. Since many organizations have returned to the traditional printed menu, Benesh says he is encouraging clients to keep a QR code for a daily special or a loyalty program.

“I think QR codes are here to stay. They’re great marketing tools, and they’re great for highlighting a small part of someone’s menu,” Benesh said.

Benesh says he encourages restaurants to think about off-menu ways to entice customers, such as pushing a dessert cart through the dining room so that every customer can see their dessert.

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