Out of the sauté pan and into the deep fryer: That’s how many restaurant operators feel right now. 
Just when operators were regaining their stride after surviving the COVID-19 pandemic, new tripwires stretched across their path: supply shortages and food price inflation, both compounded by labor shortages. In the United States, year-over-year inflation hit a 40-year high in November 2021.
The Combo Punch: Menu Price Inflation and Supply Chain Shortages
Most consumers are seeing their grocery bill rise by $10 or $20 every time they shop. Restaurateur Cameron Mitchell says his has jumped by $9 million.
Mitchell runs 60 restaurants all over the United States, from comfort-food diners to high-end steakhouses. He had to raise menu prices three times in 2021, he tells NPR: "There's not a restaurant out there today that can survive without taking the price increases.”
Menu prices climbed throughout 2021 with a record year-over-year jump in November (according to U.S. Bureau of Labor Statistics numbers): 6% for full-service restaurants and 7.9% for limited-service. Food distributor Sysco reported food inflation of 10.2 percent in the fall of 2021.
Consumers were already accustomed to paying extra, Restaurant Business observes: “Since the outset of the pandemic, consumers have visited restaurants less frequently but have spent more overall, in part because of a dramatic shift in the industry toward takeout and delivery, where consumers are ordering for more people at a time.” But customers won’t accept endless price hikes, so operators are seeking ways to keep them happy.
A related challenge is supply chain disruption. In November, the National Restaurant Association found that 95% of U.S. restaurants had experienced significant supply delays or shortages of key food items in recent months, and 75% had to make menu changes as a result.
Strategies to Help Restaurants Adapt
Make micro-adjustments to certain menu items. Rather than bumping up prices across the board, try to identify areas where customers won’t feel the pain as much. Could you raise prices of sandwiches and salads, but leave higher-priced entrees alone? Could you change the $6 happy-hour appetizers to $7?
Take a second look at your menu. Many operators overhauled their menu during COVID to adapt to supply shortages, smaller staffs, and increased delivery/take-out orders. It may be time to start that process again. Ditch the dishes that are low-margin or labor-intensive. Consider the Pareto Principle, QSR magazine suggests, which states that 80 percent of your sales usually come from 20 percent of your menu items.
Read more: Menu Trends: Should Operators Shrink or Expand Offerings?
Get flexible. Prices for meat, poultry, fish and eggs have risen faster than for other ingredients. That means it’s time to consider alternative proteins. “The time is right to explore underutilized cuts of meat and “whole animal” cooking—even applying that technique to fish,” Restaurant Business suggests, along with lesser-known plant-based proteins, nuts and seeds.
Get serious about reducing food waste. As prices rise, spoiled or unused food takes an even bigger bite out of your bottom line. Some of the best advice we’ve heard is to process your produce as soon as it’s delivered — that comes from Sandra D. Ratcliff, CEC, a longtime chef and director of healthcare sales for The Hansen Group.
That means assigning a kitchen team member to immediately handle all deliveries, even in busy periods. Instead of shoving cardboard boxes in the walk-in, that person should wash produce and vacuum-seal it to add weeks of longevity. Other ingredients, from steak to cheese, can get the same treatment. Just be sure to train kitchen staff in safe handling practices for vacuum-packed foods.
Read more: Five Ways Restaurants Can Stretch Food Budgets Further
Don’t wait to invest in new equipment. Durable, efficient kitchen equipment can give a restaurant an edge by enabling you to do more with less.
- High-performance blenders and beverage automation speed drink service
- The PrimaVac™ commercial vacuum sealer extends the shelf life of ingredients and streamlines prep
- Commercial culinary blenders help chefs come up with fresh takes on the ingredients you have
Mark Rossi, CEO of Avanti Restaurant Solutions, recently told Restaurant Business that supply chain delays in equipment could be expected to persist until at least January 2023. Fortunately, Hamilton Beach Commercial has been working hard to get equipment into the hands of our partners and customers in the U.S., and most of our commercial foodservice solutions are in stock.
Discover Hamilton Beach Commercial’s full line of foodservice equipment and schedule a demo today!
