Restaurant Value Optimization Strategies

Haven’t updated your menu prices lately? It’s costing you. In today's challenging economic landscape, regular price adjustments have become an operational necessity for restaurants. With fluctuating costs of goods, labor, and supply chain pressures, staying static can erode profit margins and undermine the customer experience. 𝐏𝐫𝐨𝐟𝐢𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐓𝐢𝐩 𝟖 𝐨𝐟 𝟏𝟎: Regularly adjust your pricing to reflect real-time costs and to protect your profit margins. 1. Understand Costs to Control Them Prices aren’t just numbers; they’re a reflection of your operating reality. Without a precise understanding of your Cost of Goods Sold (COGS) and the influence of market dynamics, you risk underpricing or overpricing. Weekly inventory checks are vital to track real-time shifts in your food and supply costs. 2. Dynamic Pricing Protects Margins Treat menu prices as a living equation tied to your costs. Regularly review your pricing to account for rising commodity prices, supply chain disruptions, or changes in portion sizes. Customers may notice and value transparency about why prices change rather than silent hikes or hidden cuts. 3. Customer Retention Through Value Instead of steep discounts, use strategic bundling or loyalty programs to emphasize value. Deals like pairing a best-seller with a new dish not only promote your offerings but also balance profit margins. 4. Small Changes Make Big Impacts A minor price adjustment can significantly affect your profitability. For example, a $0.25 increase on a popular item sold 1,000 times a month equals $250 in additional revenue—a buffer against rising costs. 5. Data-Driven Decisions Build Trust Leverage tools like POS systems and industry reports to understand customer behaviors and preferences. Align pricing strategies with your business goals while remaining sensitive to your customer base's willingness to pay. 💡 Pro Tip: Make a checklist of everywhere that your prices need to be updated, from POS to Catering Menus to Third Party Delivery Services. The days of static pricing are over. The key is not to increase prices arbitrarily but to do so informed by data, operational insights, and market trends. When was the last time you adjusted your pricing? #Restaurants #RestaurantManagement #RestaurantIndustry #Inflation #BusinessStrategy #CustomerExperience #Profitability

Focus On Restaurants Kevin O'Leary Explains Why Restaurants Are Shuttering Acriss America - And Why More Will Follow The lingering effects of the pandemic along with higher food costs, inflation, and declining foot traffic are drastically are causing many iconic restaurant chains to close restaurants and even declare bankruptcy - https://lnkd.in/ercw3yCc. Hotel restaurants are not immune. Many feel that because they have a captive group of guests just above the restaurant that they have an unlimited stream of guests who will pay $30+ for a breakfast entree and a hot beverage. Many of those guests who once dined for breakfast in hotel restaurants are now walking to the Starbucks down the street or even the Starbucks in the hotel lobby for a $10.00 hot beverage and pastry instead. What can hotel restaurants do to keep cover counts high? Have an easily understood restaurant concept that can be defined in a few words - modern steakhouse, northern Italian - so the guest can easily determine if the restaurant offers the type of food that interests them. Market the restaurant through the hotel’s Web site, newsletters, social media, and other communication channels. Review what your restaurant offers that is compelling that the restaurant’s competitive set does not. Review authenticity of the concept, unique food and beverage offerings, service, ambiance, and value for pricing charged. If your offering is no better than the competition and you offer the same old same old that you have offered for years, guests will seeks out the competition. Dine at a few competitive set restaurants and assess their strengths and weaknesses. Consider incorporating some of their strengths into your restaurant. Ensure your restaurant offers value propositions to guests. Offer a prix fixe multicourse menu item at each day part that saves guests 10 to 20 percent versus ordering items separately. Offer a happy hour (where legal) in your restaurant from 5:00 pm to 6:00 pm Monday through Thursday that offers reduced pricing on select alcoholic beverages (choose a cocktail, beer, and a red and white wine by the glass) and appetizers. Discount your wine list on Monday evenings. Guests feeling the effect of inflation will appreciate the opportunity to stretch their per diem or budget for eating out. Ensure that you subtlety market these offerings through your Web site and associates. Perform menu engineering on your restaurant menu at least quarterly to understanding what is selling well and what items should be considered for removal from you menu. And finally, train your associates at every preshift meeting on your food and beverage offerings, upselling, and service to ensure they can deliver an excellent guest experience to every guest while ringing up as much revenue as possible. If you take asuccess is never final” approach, the odds that your restaurant will succeed are high.

Looking to finish the year strong and build new habits to carry you into your best sales year ever in foodservice? Here are modern strategies that deliver results. 1. Leverage Data for Insightful Sales Modern: Use CRM and AI tools to analyze customer behavior and optimize sales strategies. Old School: Rely on intuition and anecdotal feedback. 2. Communicate Digitally Modern: Utilize email, social media, and messaging apps for real-time, personalized communication. Old School: Primarily rely on phone calls and face-to-face interactions. 3. Offer Online Ordering Modern: Provide an easy-to-use online platform for customers to place orders and track deliveries. Old School: Orders taken over the phone or fax, prone to errors. 4. Focus on Educational Content Modern: Share cooking tips, industry trends, and product knowledge via blogs, newsletters, and social media. Old School: Focused on product specs and pricing alone. 5. Use CRM for Personalized Service Modern: Leverage CRM tools to tailor communications and follow-ups based on customer data. Old School: Handwritten notes or spreadsheets that can miss key details. 6. Highlight Sustainability & Local Sourcing Modern: Emphasize partnerships with local, sustainable suppliers and eco-friendly practices. Old School: Focus on cost and availability with less emphasis on sustainability. 7. Adopt a Consultative Sales Approach Modern: Act as a problem-solver, helping customers improve supply chains or reduce waste. Old School: Focus on selling products without solving broader customer issues. 8. Use Mobile Tech for Real-Time Engagement Modern: Enable mobile ordering and provide updates via apps or cloud platforms. Old School: Relied on paper forms and manual entry. 9. Promote Social Proof Modern: Use customer reviews and testimonials on digital platforms to build credibility. Old School: Relied on word-of-mouth and local reputation. 10. Prioritize Long-Term Relationships Modern: Build loyalty through consultative selling, aligning with customers' long-term goals. Old School: Focused on quick transactions rather than fostering ongoing partnerships. Building some of these into your toolkit can increase your value to the customer and the organization as well as provide or set yourself up for financial and professional growth.

“If we try to play like the Yankees in here, we will lose to the Yankees out there.” I hope you've seen the movie Moneyball, and if not—well, now you know what to watch this weekend. “Moneyball” tells the story of how the Oakland A's, under general manager Billy Beane, used data-driven analysis to build a competitive baseball team on a limited budget, challenging traditional scouting methods. Restaurants are feeling a similar pinch in the current economic climate. Rent, labor, and other input costs are on the rise. Most restaurants are taking price to offset some of those costs, and unfortunately, it comes at the expense of traffic. The answer is not solely discounting and value menus. We need a new strategy to drive profitable traffic. Taking a page out of Billy Beane’s playbook, restaurants can leverage their first-party data to compete. By focusing on guest data—information that only the brand has access to—restaurants can treat guest lifetime value (GLV) as a North Star metric and use guest intelligence to drive strategic decisions. A data-driven approach, specifically one centered on guest data, empowers restaurant brands to win guests in ways that go beyond the typical tactics of value menus, discounts, and price slashing. Instead of driving traffic at the expense of long-term brand value and franchisee profitability, brands can focus on maximizing what they already have by using data to make smarter, more sustainable decisions.

It’s easy to say, “I need to invest $800,000 in bar equipment and 22 custom stools at $750 each.” The drawings, renderings, and numbers look impressive on paper – and yet, this could be a winning framework, or a devastatingly impossible framework. Here's the profit architecture framework that saved my restaurants 👇 Every square foot, every piece of equipment, every seat gets measured against: ✅ Revenue potential ✅ Labor costs ✅ Cost per square foot ✅ Customer frequency & spend ✅ Through-put (table turns) The bar takes up 7% of my 10,000 sq ft space - so it better generate proportional returns either in revenue, or cash flow. Do the math before you build, so when the math doesn't work, you have 4 levers to pull: 1️⃣ Change menu prices 2️⃣ Optimize space allocation to add more seats 3️⃣ Drive more customers 4️⃣ Increase average check Too many restaurant dreams die because entrepreneurs fall in love with the vision but ignore the numbers. What's cool is when you really dive in and build a profit architecture, you'll find out - oh, this piece doesn't work. The question isn't whether your concept is cool. It's whether the math works when you push it through the business. #restaurantmanagement #businessadvice #restaurateur #entrepreneurship #businessstrategy