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Adapting to Rising Costs in Food Service

The costs of maintaining a food service operation are rising, as both food and labor costs continue to soar across the globe. Although government assistance provided some relief for restaurants during the pandemic, as grants and loans come to an end, restaurants are faced with the challenge of staying afloat and rebuilding to become profitable. Being adaptable and remaining focused on building cost-saving infrastructure has become critical to restaurant success.

 

There are several ways restaurant operators are adapting to the rising costs in food service. 

 

First, which comes as no surprise, restaurants are raising prices to accommodate rising costs and inflation. As reported by CNBC, “With 30% of Gen Z respondents said they plan to interact with other people more than they did before the pandemic,” which can help restaurant operators remain optimistic that diners are eager to return to the table. An increase in menu item pricing year-over-year is not particularly new to restaurant go-ers, so as long as your pricing is still attractive based on the food offering, price increases may be a necessary and important part of your strategy.

 

Second, they are investing in technology to help them cut costs. Although an investment in technology may seem difficult to swallow when margins are already paper-thin, the long-term benefits of investing in stable, helpful, useful technology to run your food service operation will help you build (or rebuild) your business – leading you to thrive for years to come.

 

There are several types of technology in particular that are turning heads when it comes to their return on investment.

 

  1. Self-Serve Kiosks

 

Self-serve technology was already on the rise before the pandemic, but is now virtually a staple in all quick service restaurants and across corporate dining. As Innowi reports, “65% of customers are more likely to visit your restaurant if you have a self-ordering kiosk system.” Not only do these sleek units help you attract customers, but their abilities include running 24/7, reducing errors in ordering, and easing the burden associated with the current labor shortage by acting in the place of a staff member. Adding multiple kiosks can provide more order points for customers, encouraging more orders and generating increased revenue. Kiosks can also be programmed with combo and upsell prompts that increase your average check size.

 

  1. Digital Ordering

Increasing the channels from which your customers can order is a great way to increase order flow and adapt to rising operational costs by generating more revenue. Digital ordering is commonly inexpensive to adopt, easy to set-up and maintain, and can provide access to additional marketing opportunities through third party partners like Uber Eats and DoorDash.

 

  1. Inventory Management & Recipe Costing

 

As reported by Apicbase, “Operators who do a weekly inventory turnover calculation add 2% to 10% to their bottom line.” With food costs presenting a huge challenge for businesses, every percent added to your bottom line counts. Inventory solutions can be complex – providing end-to-end order management with ingredient level recipe costing and links to food distribution. They can also be simple, which is a great place to start. Understanding the costs of your menu items and doing a comparison on your costs vs. sales allows some insight into which items have high-margins versus low-margins. From there, serving staff can recommend more profitable items, and staff can ensure that the lower-margin items are not going to waste. Ensuring you are ordering the right amount of each item to support your business is critical, and this can be properly calculated once you start tracking inventory.

 

By implementing technology tools in tandem with marginal, fair cost increases, restaurant operators can bounce back from the pandemic and begin to experience profitability for years to come.

 

Let’s talk about how Volante can help you through a technology strategy that fits with your budget and business needs. Contact us today to chat.

Shannon Moyes

Director of Business Development – Volanté Systems


Learn more about how Volanté can help your business.