If it feels like everything has gotten more expensive lately, you are not alone. Inflation has rocketed in the aftermath of the Covid-19 pandemic. While there is no business in the world that is unaffected by inflation, restaurants tend to get hit especially hard.
In times like these, restaurant owners should be quick to adjust to more cost-efficient strategies if they want to compete in a challenging market.
Below are four ways restaurant owners can make a profit while battling inflation.
Buy local
When you can, buy locally to cut down on transport costs (a real factor when gas prices are at an all-time high) and to build relationships with farmers.
Cultivating relationships can help you get better deals and perhaps even lead a farmer to grow or produce an item just for you, which can be a selling point on your menu, too.
Focus on alcohol specials and happy hour deals
Rising costs are like pick-pockets, lightening the wallets of customers and cutting their spending powers. When restaurant traffic slows, it is natural to try to attract customers through discounts and daily specials.
Knowing where to apply discounts is important. Whether you would like to promote happy hour specials or offer half-price wine deals, build a promotional strategy focused on alcohol sales.
Make creative ingredient substitutions
With inflation having a serious impact on food costs, it is only natural that some ingredients are going to cut into your bottom line. You could have a great selling dish, but if it has an expensive ingredient, that could seriously impact the profitability of your business.
To counteract that, look into ways in which you can creatively swop the ingredient in the dish for something less expensive. If you can reduce costs on ingredients but sell the dish for the same price, then you are going to have higher profit margins.
Analyse the competition
Even if you have tried everything else, there may come a time when you have to adjust your pricing. Before marking up random items on the menu, however, you would want to take a look at what other restaurants are charging for similar items.
You do not want to be needlessly overpriced, as that will drive customers to your competitors. Additionally, this analysis will show you where you have got some breathing room to make some mark-ups but do not change too much at once.