Pair price changes with scheduled menu reprints.
One restaurant owner says that his restaurant’s prices are evaluated quarterly and changed at the same time as seasonal menus, resulting in minimal reaction from customers. A great time to make changes in price has been when we debut seasonal menus.They’ve raised and lowered prices with the reprints, some due to supplier price changes and others due to the competitive landscape changing in our area.
Do you have a best-selling menu item that can remain the same price while charges for other items increase? Restaurants raise prices every year. One approach is to have one anchor ‘pricey’ item, in your case, a $20 hamburger, and then raise everything else in small, incremental amounts once a year.
Talk with your supplier before raising prices.
If you’ve been raising prices due to ingredient costs, try working with your suppliers to bring some of those everyday costs down. Talk to suppliers when you see prices change to see if it’s a temporary supply issue or if it’s a bigger, more long-term, problem that will not simply correct in a couple weeks. Work with them to see what alternate products may be available that could swap into your menu, and also keep your eyes open for specials or items that you don’t regularly stock that you can bring in as a special that can help you bring costs down to offset something that may have gone up in price.
Tread lightly when lowering prices.
While many restaurateurs are vehemently against lowering prices, some have found success with raising and lowering prices at the same time. If you’re going to raise prices, look for any items that can be lowered. Where prices rise and fall at least once a year due to the rising costs of ingredients. No customer will like rising prices, so if you can lower prices where you can, they will appreciate it more.
Another reason some owners lower the price of certain menu items is to maintain their restaurant’s concept. One restaurant moved a few items down in the last six months to help them become more attractive to customers to purchase. These are items that still maintain a strong margin, or are dishes that they feel represent their concept really well that they want to make sure are getting on the tables and into the customer’s mouth.
Do you have a menu item that you’re thinking of raising—or lowering—the price of significantly? Study your sales numbers and you may find that the best option is to remove them altogether and focus on your best sellers. There were some wines that in order to make proper margins they had to charge amounts that our guests wouldn’t pay, so they sat on the shelf. They relooked and removed some of them from the menu. They found that when they focus on their top 20 items in food and beverage, small changes on those helped make sure their overall costs stay in line.
If you have to raise a price on an item, see if you even need it. You hate raising prices and have removed items from the menu if it becomes too cost-prohibitive or isn’t that popular.
Raise the perceived value of an item before raising the price.
Customers tell you every day how much they perceive the value of your menu items to be by either purchasing or not purchasing them. There’s a lot you can do to raise the perceived value of an item through replating, using different cuts of meat and thinking outside the box.
Source: restaurant-hospitality.com, 2-8-2016