The effects of inflation–including food inflation–on restaurant menus are highly visible from third-party perspectives, and deeper in terms of restaurant businesses. Of course, the effects of inflation on menu items also affect a bar business and other establishments in the hospitality industry. Any business with a menu has and will continue to feel the effects of inflation. Even the top 25 Michelin Star restaurants.
From a brunch menu to a dessert menu to an entrée menu, inflation issues span across the board. Inflation in regards to the food supply chain affects everything from items like meat products to wholesale seafood to spices, salt, and sugar. Ingredients like grains and spices can be harder to find at a reasonable price.
Overall, restaurant menus experience a lot of changes caused directly or indirectly by inflation. Some are on the backend in the form of reworking recipes and available dishes.
Other changes come in the form of pricing adjustments. In this BinWise blog post, we dive into five effects of inflation on restaurant menus. We also offer some solutions to these effects to keep restaurants running smoothly through inflationary periods.
5. Printed Menu Changes
If you’re in the practice of using physical menus, including a single use menu, you know how much time and money goes into printing them. When you have to change your menus to accommodate inflation-induced price changes and ingredient availability, those changes add up faster. Physical menus are a small cost when viewed singularly, but reducing your expenditures here overall adds up and helps your budget.
An effective solution to making printed menu changes is to utilize a QR code menu. Learning the answer to, “How do QR codes work?” will save you the hassle of reprints as prices change. From custom QR code design to using the best QR code generator, there’s plenty to learn. With strong foundational knowledge you can start using QR codes to simplify and meet your menu needs.
4. Item Scarcity Through Competition
One inflation side effect in the restaurant industry is the reduced availability of specific items. When such items’ prices rise, every business purchases more of these in bulk so they don’t have to worry about the short term. When such activity takes place with items that are already in short supply, this leads to scarcity and stockouts for many businesses.
There isn’t one solution to this issue, because you can’t coordinate industry-wide help to ensure everyone stays stocked. What you can do, as an individual business, is only buy what you need (not forgetting safety stock, of course).
When your preferred ingredients aren’t available, lean into other menu items that make use of ingredients with greater availability. You’ll have to get creative with menu options, but that can be a boost for profits–from restaurant to bar profits–as you mix up what you offer.
3. Extra Work for the Kitchen Staff
Poor food supply chain management and inflation scarcity lead to extra work for the kitchen staff, from the Sous chef to the pastry chef. When the kitchen has fewer ingredients to work with, they have to be extra careful and plan ingredient usage scrupulously. This adds an extra level of stress to an already very busy kitchen.
You can work against this effect of inflation by streamlining your restaurant inventory process and order management. A system like BlueCart, which brings together everything you need for order management, can help you keep track of what is coming in. BinWise as a platform–BinWise Pro paired with the BinScan mobile app–helps you track and take inventory in real time. With that, your kitchen staff has a clear line of sight into your real-time inventory.
"Key Takeaway: Inflation in regard to the food supply chain affects everything from items like meat products to the small ingredients that make up recipes."
2. Additional Wait Staff Training
The direct effects of inflation on menu items and pricing make it difficult for wait staff to do their jobs. From keeping track of menu changes to keeping customers satisfied with menu alterations, inflation puts extra pressure on wait staff.
You can use a restaurant training manual and have regular training sessions with your staff to keep things moving smoothly. On top of those solutions, the best thing you can do is keep your wait staff updated on what is changing and why. If you’re all on the same page, you can run the restaurant together and keep customers happy.
1. Rising Prices
The price increases that come along with inflation are the main point of concern for restaurant menus. As the inflation rate increases, the cost to buy ingredients rises alongside it.
There’s no concrete way around those price effects reaching the menu. It’s the main reason fewer people go out to eat when inflation is on the rise.
There’s no way to completely avoid raising menu prices, but you can mitigate it. You can raise prices only as much as you absolutely need to. You can also lower prices in other areas with more room to do so, the areas that include items that aren’t affected by inflation.
The main thing to do is just keep moving forward, too. You can take care to only raise prices when you need to. You can also keep up your restaurant menu quality to balance the increase in cost.
Frequently Asked Questions About Inflation Effects on Restaurant Menus
The process of pricing a menu can be confusing enough without inflation in the mix. There’s a lot you should know when you’re preparing a menu, from how to design menu types to how to use psychological pricing.
There’s also a lot you can read up on about inflation and restaurants, to feel more confident in dealing with inflation. Our answers to these questions will help you along:
How Does Inflation Affect Restaurants?
Inflation affects restaurants by limiting availability of ingredients and other items, and by making prices rise for customers. Ultimately, inflation makes it more expensive for restaurants to continue to offer great customer service. That makes it less likely for people to go out to eat.
Why Does Increased Inflation Lead to Menu Changes?
Increased inflation leads to menu changes, both in pricing and in dish availability. That's because inflation makes it harder to get the same items for the same price. When inflation increases, the items affected by inflation become costlier and scarcer, because people buy up whatever they can get.
Overall, the menu items affected by inflation are harder to get a hold of, and pricier for the restaurant and the customers.
What Is Menu Inflation?
Menu inflation is specifically related to the rise in prices you see on menus due to inflation. You can view this inflation by checking out prices on a menu from year to year, or even quarter to quarter. The time frame depends on the inflation rate. Compare those prices to inflation rates, and you’ll see inflation directly on the menu.
What Does Menu Pricing Mean?
Menu pricing is the calculation of the cost to prepare a dish in relation to the profits of the restaurant. Menu pricing is set up to make the cost to the restaurant lower than the profits coming in for the average order. When inflation rises, finding a balance between profits and customer satisfaction becomes more difficult.
Inflation Effects: Time to Pop the Balloon
When you know how inflation affects restaurant menu prices and availability, you’ll be more prepared to handle those effects. As inflation rates rise, you can rest assured that you know what to do to manage your restaurant, how to survive inflation and come out the other side.