Galloping inflation – how to deal with it? 4 steps to saving

What exactly is inflation? Inflation is the process of change, or more precisely, the increase in prices in a given economy. This means that having a certain amount of money we can buy fewer goods for it. We invite you to read an article on coping with inflation, written by Mr. Maciej Możejko - an expert MAKRO, which helps restaurateurs grow their businesses.

How can you cope with the effects of inflation when running a restaurant? The simplest and riskiest solution is to raise prices . If grocery prices are rising, then the prices of dishes and beverages should rise as well. These can be changed practically overnight – this type of solution is probably the simplest. Why is it the riskiest ? The answer is very simple: restaurant guests react very negatively to price increases. This process can be explained by our commitment to maintaining the quality of the raw materials we use. However, it's known that shortcuts can be dangerous, so it may be worth taking a slightly longer, but more defined route. Menu engineering can help here.

Menu engineering has its origins in the 80s, and I dare say that once you've chosen this path, you'll always follow it. What exactly is menu engineering? It's a quasi-scientific approach to sales and menus. In my opinion, it's the second most important tool in restaurant management (the first being food cost ). This approach involves carefully examining the menu for profitability and sales, then drawing the appropriate conclusions and achieving the desired business results.

What does it take to perform menu engineering?

• Good sales systematics (preferably POS-system or entering each menu item with a separate price at the cash register).
• Calculated food cost for individual dishes.
• Willingness to introduce change – this is a key factor, because it is where the driving force lies.

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4 steps to apply menu engineering:

1. Investigate your food cost

It is necessary to determine how much specific items on the menu cost. Why is this so important? It may turn out that the dishes that sell best are practically unprofitable.

2 Check how sales of individual menu items are shaping up

Generate a monthly report from your POS or cash register, including information on how many items you've sold of each dish from your menu. This is crucial, in conjunction with information on food costs. Often, reality turns out to be completely different from the restaurateur's expectations.

3. Classify your menu based on sales and profitability

Here, you can very often experience a situation in which the most popular dish chosen by restaurant guests is not particularly profitable, i.e. one that significantly exceeds the average food cost. To classify individual items on the menu, it is worth referring to the BCG matrix.

Step 4 and an example of how menu engineering looks and works in practice can be found on the MAKRO website. Click the banner below to read the rest of the article. ⇓

Author of the article: Maciej Możejko

Together with MAKRO, I help restaurateurs develop their businesses. I provide support and advice on restaurant organization in almost every aspect of its operation. I cordially invite you to learn more about our services and our client testimonials , and to schedule a free consultation at ekspertbiznesowi@makro.pl.

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Download our free Profit and Loss Statement for Catering! Calculate fixed and variable labor costs, as well as the food cost of your menu.