{"id":4282,"date":"2022-02-03T12:18:21","date_gmt":"2022-02-03T16:18:21","guid":{"rendered":"https:\/\/lgcassocprod.wpengine.com\/?p=4282"},"modified":"2024-03-12T11:13:33","modified_gmt":"2024-03-12T15:13:33","slug":"should-you-increase-menu-prices","status":"publish","type":"post","link":"https:\/\/lgcassociates.com\/es\/should-you-increase-menu-prices\/","title":{"rendered":"Should You Increase Menu Prices?"},"content":{"rendered":"<p><span data-contrast=\"none\">Every week we comb through the news to find employment trends affecting the hospitality industry so you don\u2019t have to. This week\u2019s Hospitality in the News topic: should you increase menu prices? <\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><!--more--><\/p>\n<p><span data-contrast=\"none\">At this point, it\u2019s been years since the restaurant industry wasn\u2019t dealing with some sort of pandemic-related crisis. COVID closures, staff shortages, and now supply chain issues that are inflating <\/span><a href=\"https:\/\/lgcassociates.com\/es\/rising-food-costs\/\"><span data-contrast=\"none\">food costs<\/span><\/a><span data-contrast=\"none\">. As owners and managers continue to navigate this challenging landscape, many are wondering how to combat inflation, which begs the question: should you increase menu prices?<\/span><\/p>\n<h5><b><span data-contrast=\"none\">Should You Increase Menu Prices?<\/span><\/b><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/h5>\n<p><span data-contrast=\"none\">Reports show that some restaurants, like <\/span><a href=\"https:\/\/www.nrn.com\/quick-service\/domino-s-changes-menu-deals-anticipation-wage-inflation-and-increased-food-costs?NL=NRN-02_&amp;Issue=NRN-02__20220113_NRN-02__367&amp;sfvc4enews=42&amp;cl=article_1_1&amp;utm_rid=CPG06000019391345&amp;utm_campaign=49210&amp;utm_medium=email&amp;elq2=38d6de8481ed46e29bd2b30854826654\"><span data-contrast=\"none\">Domino\u2019s<\/span><\/a><span data-contrast=\"none\"> and <\/span><a href=\"https:\/\/www.restaurantbusinessonline.com\/financing\/menu-price-inflation-hit-record-october#\"><span data-contrast=\"none\">Ruth\u2019s Chris<\/span><\/a><span data-contrast=\"none\">, have already begun increasing menu prices in small increments \u2013 and surely other restaurants have followed suit. Though there\u2019s a lack of reporting surrounding independent restaurants, they\u2019ve likely increased menu prices as well whether it\u2019s to counterbalance higher wages or menu prices. <\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">When thinking about whether to raise menu prices, it\u2019s important to consider a few things, such as: <\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span data-contrast=\"none\">What the additional revenue goes towards<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559737&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span data-contrast=\"none\">How much to increase prices by<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559737&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"3\" data-aria-level=\"1\"><span data-contrast=\"none\">How customers will feel about the change <\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559737&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"none\">By taking these items into consideration, you can better create a plan for if\/when you decide to make changes to your prices. <\/span><\/p>\n<h6><b><span data-contrast=\"none\">What the additional revenue goes towards<\/span><\/b><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/h6>\n<p><span data-contrast=\"none\">More often than not, managers will be putting additional revenue from increased menu prices towards food costs; according to Restaurant Business Online, \u201crestaurant-related inflation rose 0.6% in December and 6% total in 2021, the largest increase since 1982.\u201d <\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">There are other options when deciding what additional revenue could go towards. Some managers will opt to increase employee wages in hopes of better attracting candidates. Other restaurants have opted to put their money towards their staff in a more unique way \u2013 by providing health insurance. <\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<h6><b><span data-contrast=\"none\">How much to increase prices by<\/span><\/b><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/h6>\n<p><span data-contrast=\"none\">Deciding how much to increase menu prices by will take a lot of thought and research. You\u2019ll want to know how competitors&#8217; price their offerings, what consumers will be willing to pay, and other geographic data. You should also consider the science behind \u201c<\/span><a href=\"https:\/\/www.webstaurantstore.com\/article\/89\/menu-psychology-the-science-behind-menu-engineering.html\"><span data-contrast=\"none\">menu engineering<\/span><\/a><span data-contrast=\"none\">,\u201d which looks at the psychology of designing your menu (including prices). <\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<h6><b><span data-contrast=\"none\">How customers will feel about the change<\/span><\/b><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/h6>\n<p><span data-contrast=\"none\">This is the biggest concern surrounding increasing menu prices. A recent report by <\/span><a href=\"https:\/\/www.nrn.com\/finance\/price-inflation-concerns-grow-among-customers-according-yelp?NL=NRN-02_&amp;Issue=NRN-02__20220131_NRN-02__129&amp;sfvc4enews=42&amp;cl=article_1_3&amp;utm_rid=CPG06000019391345&amp;utm_campaign=49530&amp;utm_medium=email&amp;elq2=7ed7888c3ba941aeb1728876bbb22820\"><span data-contrast=\"none\">Yelp<\/span><\/a><span data-contrast=\"none\"> revealed the following data about consumer sentiment regarding price increases: <\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" aria-setsize=\"-1\" data-aria-posinset=\"4\" data-aria-level=\"1\"><i><span data-contrast=\"none\">\u201cReview mentions of price increases \u2014 including comments like \u201cused to be cheaper\u201d and \u201cmore expensive \u2014 have grown 29% from the fourth quarter of 2020 to the fourth quarter of 2021.\u201d<\/span><\/i><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559737&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" aria-setsize=\"-1\" data-aria-posinset=\"5\" data-aria-level=\"1\"><i><span data-contrast=\"none\">\u201cBut even though customers are complaining about price jumps at their favorite restaurants, that has not slowed down their spending. In fact, according to Yelp, searches for the highest-priced restaurants have increased by 56% in 2021 when compared to pre-pandemic levels, likely at least in part due to pent-up demand from so many people staying at home for a year or more.\u201d<\/span><\/i><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559737&quot;:0,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"none\">The report also mentions that despite this data, customers are continuing to choose delivery\/take out options over dine-in. Keep this in consideration when adjusting menu prices. <\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:160,&quot;335559740&quot;:259}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Due to supply chain issues, it\u2019s expected that inflation and rising food costs will continue to plague the restaurant industry. Though it\u2019s not always the ideal option, increasing menu prices can help solve some of the challenges managers are facing right now.<\/span><\/p>","protected":false},"excerpt":{"rendered":"<p>Every week we comb through the news to find employment  [&#8230;]<\/p>\n","protected":false},"author":67,"featured_media":312667,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[106],"tags":[406],"class_list":["post-4282","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-hospitality-in-the-news"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.0 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Should You Increase Menu Prices?<\/title>\n<meta name=\"description\" content=\"All the industry trends you need to know. 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