Restaurants are feeling the pinch these days. Between skyrocketing labor costs and inflation nibbling away at profits, it’s a tough time to be in the food biz. Wholesale food prices are up by a whopping 30% since February 2020, according to the National Restaurant Association, making it even harder to keep the lights on and the ovens hot.
Meanwhile, diners are cutting back on eating out. A recent Ipsos survey found that over a third of Americans have reduced their restaurant visits in 2024—this includes everything from fast food to sit-down meals and delivery orders.
With all these cost pressures, restaurant owners need to get creative and find ways to keep costs down without scaring off their customers. So, how do you fight inflation without slapping a major price hike on your menu? Here are some ideas to help you stay afloat (and maybe even thrive) in these challenging times.

1. Give Your Menu a Makeover

People still want to eat out, but their wallets are feeling the heat. Revamping your menu can help you balance price increases and keep your customers happy.
Here are some fun menu strategies:

• Add some wallet-friendly options: Sure, keep your high-end dishes for the fancy folks, but why not add a few budget-friendly options—think tacos, sliders, or small plates that won’t break the bank?

• Offer specials when it’s slow: Happy hours, early-bird specials, or late-night deals can help fill seats during off-peak times and keep customers coming back for more.

• Shrink the portions, not the flavor: Nobody likes to feel short-changed, but smaller portions may be the answer to combating inflation without scaring diners away. They’re less likely to notice if they’re getting a little less of the good stuff.

• Use ingredients more wisely: Instead of stocking up on dozens of types of cheese, try using the same ingredients across multiple menu items. The more you can use, the less you need to stock!

• Ditch the duds: Time to get real about which items are bringing in the dough—and which ones are just filling up space. If an item’s not selling well or it’s costing too much to make, it might be time to say goodbye

2. Optimize Your Staff Like a Pro

Labor costs are often the second-biggest expense for restaurants (right after food costs). With wages rising and staff shortages still a thing, it’s important to keep your staffing levels on point.
Here’s how to keep it efficient:

• Use your data to avoid overstaffing: Look at past sales and traffic trends to figure out the best times to schedule staff. If you can avoid having too many people working when it’s quiet, you’ll save some cash.

• Keep your best employees happy: Recruiting and training new staff is expensive. Offer competitive pay and flexible schedules to keep your all-stars around.

3. Rethink Your Hours of Operation

Not all hours are created equal. If your restaurant is open during slow periods when business is sluggish, you might be wasting valuable resources.
Here’s how to rethink your hours:

• Close during the down times: You don’t have to stay open all day, every day. Close up between lunch and dinner, or consider shutting down on quieter days like Mondays and Tuesdays.

• Analyze traffic patterns: Use customer data to find out when your restaurant is busy and when it’s not. You might find that extending hours during peak times or adding a Sunday brunch could be more profitable than staying open 24/7.

4. Get Creative with Revenue Opportunities

The pandemic taught restaurants to get creative—and that lesson is still relevant today. Here’s how to keep your revenue flowing:

• Boost takeout orders: If customers are looking for ways to save money, takeout can be a win-win. Offer meals that are easy to take home and promote it as a cost-saving option.

• Host themed events: Think trivia nights, live music, or special dinner events. They’re a great way to draw a crowd and keep your place buzzing.

• Introduce a rewards program: Give your loyal customers a reason to keep coming back with a rewards program. Whether it’s discounts, freebies, or points toward future meals, everyone loves a little extra.

• Extend your hours strategically: If you notice demand during certain times (like breakfast or brunch), why not expand your hours to tap into that market?

5. Let Technology Work for You

Running a restaurant is a complex balancing act, but tech can help make things easier. A recent survey by the National Restaurant Association found that 60% of customers are open to ordering from tablets, and 63% are down with ordering from their smartphones. So, why not embrace the digital revolution?
Here are some tech tools that can streamline your operation:

• Online ordering: Platforms like Toast and Bentobox let you take orders online and handle payment processing seamlessly. You can focus on cooking while the tech does the rest.

• Reservations: Apps like OpenTable and Tock let customers book a table with ease, and they also come with cool features like reservation reminders and loyalty rewards.

• POS systems: Systems like Square and Toast make payment processing a breeze and give you insights into your sales trends, helping you make informed decisions.

• Staff scheduling: Software like 7shifts helps optimize your staff scheduling, making sure you’ve got the right number of people working at the right time.

• Email marketing: Tools like Mailchimp help you stay in touch with customers and send out promotions, new menu items, and event updates.

• Social media management: Platforms like Hootsuite and SproutSocial help you schedule posts and keep your audience engaged across all your social channels.

In Conclusion: Stay Agile and Adapt!
Inflation is a tough challenge for restaurants, but those who take control of costs and get creative with revenue ideas will be better positioned to thrive. By updating your menu, managing your staff wisely, and leveraging technology, you can continue to serve up great experiences without sacrificing your bottom line. Bon appétit to success! Call our office today at 423.541.1111 to learn more Commercial insurance and Risk Management Solutions.