Operators prepare for menu price hikes in 2023 following price increases in 2022 to support rising food, labor expenses
Ninety-two percent of surveyed restaurants increased their menu prices this year. The average increase restaurant operators are raising totals 8%. And 73% plan on increasing menu prices in 2023. This, according to the company behind restaurant management software Restaurant365 (R365) in its 2022 State of the Industry Customer Survey.
Restaurant operators are grappling with food and labor cost increases. These are two leading cost drivers, notes R365, and most respondents saw increases in both. Labor rose 9% and food costs increased 10%, on average. Menu price increases and expense management are helping offset these expenditures.
“Operators are finding strategic ways to drive profitability,” states Tony Smith, chief executive and co-founder of Restaurant365. “Restaurants who are already making data driven decisions to lower labor costs, control inventory, and reduce waste can also turn to menu engineering to improve their margins. This analysis will make it clear which dishes need recipe or portion adjustments, an increase in price, or to be removed from the menu.”
With regard to 2023, 75% of survey respondents expect labor costs to increase. As such, they plan to focus on recruiting and retention. In addition, 38% plan to use increased spend and resources on salary bumps and recruitment to combat this ongoing challenge.
“Many are predicting an economic downturn in 2023,” notes Smith. “While many business sectors begin to brace for uncertainty, the restaurant industry has already learned how to be more efficient with their business operations over the past couple of years. They are well prepared to operate no matter what economic challenges may lie ahead and can focus their efforts on other pressing issues such as recruiting and retention.”
The 2022 Restaurant365 State of the Industry Customer Survey finds that operators anticipate the obstacles experienced in 2022 to continue into 2023. However, the uncertainty certainly has not discouraged the hope of future growth to most. The survey results indicate that nearly 60% of respondents have growth planned in 2023.
“Restaurant365 is proud to support the growth of our customers,” says Smith. “We have helped over 40,000 restaurants streamline their operations and increase their margins. Once operations have been transformed and a brand is profitable in one location, the model can quickly scale to be leveraged in new locations.”
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