[Restaurant Community]

Restaurants are being squeezed; customers can't afford higher prices and our food costs are rising fast. How much can restaurants pass on to customers?

[mattm]

Honesty is usually the best policy. Have a VALUE MEAL section in your menu. At the top of this section explain that food costs are rising very fast and you want to try to keep your prices down so that your customers can still afford a night out. Explain that you have made some smaller portions meals for this purpose. Make sure the meals that you have in the value section are a good value for the customer. But also make sure that they are high profit meals.

[Damon]

There has to be a balance between our increased costs and pricing; I hit my prices significantly in January..of course being in Ca. we also had a .50 per hour minimum wage increase to deal with. I don't think we need to be apologetic about it, anyone who has gone to the grocery store knows that the cost of food has gone up significantly. If you're an indie like myself, you can't truly compete with the chains/fast food on pricing for "value meals", I mean can you match $5.00 pizza's, dollar menus, "right sized meals starting at $5.00" let alone the massive amount of advertising that's being done by the chains? If you start trying to compete at that end of the spectrum, you've got to cut the quality of your product to match the price, which leads to a permanent loss of customers and the branding of your restaurant as a "cheap place" to eat; not a brand I want.

[Psychlone]

I agree totally with Damon. Cutting quality to compete with the chains isn't going to happen in my restaurant.

But, one thing that I'd like to let you all in on, is this: I use the big chains' advertising to my advantage! When they marketed Flat Iron steaks on tv for a national chain, I brought in some nice flat-iron steaks...the price was right and I purchased quite a few cases of pre-cut, cryovac steaks. Then, making a killer sauce and doing nothing more to the meat than a little S&P, I made a killing! I've since let all the 'big boys' do my advertising for me - every time I see the next 'big thing' on tv, I check with my 3 purveyors on quality, pack size and pricing, purchase the one that makes sense, and create either a menu item that resembles what everyone's seen on tv, or make something that's all my own - being sure to use something *close* to the catch phrase that's in their marketing (but not quite the same, as to avoid any copyright infringement!)

This practice has worked well over the years, and I don't think I'll be changing it anytime soon!

Anyway, that's only really part of my plans-in-action...pair that up with watching labor cost, food *waste* (since purchasing lesser quality products is out of the question for me!) and serving slightly smaller portions (literally .25oz less on a 5.5oz sandwich is not noticeable to the customer - as long as you're not advertising 5.5oz of meat!)

Psychlone

[Damon]

I've had flat irons on my menu for about 4 years now, and since "everyone" is selling and advertising them now my sales have jumped significantly. Sadly the price of the product has almost doubled with the increase in usage by the chains.