Blog Article

5 Ways Restaurant Owners Can Fight Inflation

It was a lot easier to make money in the restaurant business 10 years ago. Although Canada’s inflation rate sits around 2%, that number is modest compared to what the restaurant industry has seen. Food prices have skyrocketed (tried to buy celery lately?), wages have gone up, and as a consequence, your suppliers have increased their prices as well.

As a restaurant owner, you’re probably seeing the impact of these variables on your profit and loss.

Raising your prices might be inevitable, but it’s not a tactic you should depend on because it can drive away customers. Below you’ll find a series of tips to cut costs and increase profits without messing with the quality of your food and service.


Make creative ingredient substitutions.

Almost 75% of restaurant managers report food costs as one of their biggest challenges.

If you can relate, it’s time to take a closer look at your inventory costs. Is there an ingredient you use a lot that’s seriously cutting into your bottom line? Maybe one of your best selling dishes is great at bringing in revenue but it includes a pricey ingredient that’s impacting your profit.

Explore ways you can swap that ingredient for something less expensive and calculate how much you’ll save. Then figure out how you can do the swap in a creative way that maintains demand for the dish. Maybe Margarita Mondays feature a lemony twist on the classic or your signature salad comes topped with dried chickpeas instead of almonds.


Do a proper menu audit.

To do this properly, you’ll have to take a good look at your menu and know the profit you make on each dish (or do a little math to figure it out). Segment your items into four groups and make some adjustments based on their performance:

  1. High profitability and high popularity - People love these and you're making money on them. How can you better highlight and promote these items
  2. Low profitability and high popularity - People love these, but they’re costing you. Can you experiment with different ingredients or cut down on portion size.
  3. High profitability and low popularity - Try and understand why these items don’t appeal to people. Is it the price, is it how you’ve positioned them? Can you change that by making them a weekly special or promoting them in a different way?
  4. Low profitability and low popularity - If no one likes them and they aren’t making you money, take them off the menu. If you're not ready to make the cut, try increasing demand by adding them to a limited-time seasonal menu. Or, at the very least, do a menu audit to make sure you're not overstocking ingredients for a dish you rarely serve.

Reduce food waste.

Food costs account for around 35% of most restaurants’ total costs. If you’re not on top of monitoring inventory, a big chunk of your budget is at risk. Don’t just count your inventory, dig into the numbers and understand where you’re losing money because of waste or over-portioning.

There are a ton of apps out there that can help you with inventory management by eliminating the need for manual counting. Food waste doesn’t just happen at the back-of-the-house either. If you notice your customers aren’t finishing their dishes, look into whether the kitchen needs to decrease portion sizes.

One fun way to combat food waste is to get creative with your recipes by making sure they're optimized to use as much of your ingredients as possible — you’d be surprised how delicious roasted potato peels are...


Get online ordering (if you haven’t already).

Just because wages have gone up doesn’t mean you should get rid of half your serving staff, but offering take-out is a great way to sell more without having to increase server labour costs.

With the rise of Uber Eats, SkipTheDishes, DoorDash, and the list goes on, ordering online is one of the most popular ways people interact with restaurants. Offering online orders can expand your customer base with relatively low investment: a point of sale system to process the transactions (keeping online and in-person orders separate is important) and a kitchen to keep up with demand.

If you’re looking for a low-cost POS for online and in-person ordering, some smart terminals like Poynt offer free apps that allow you to set up online ordering.


Re-think your software.

Many restaurant management and POS systems aren’t cheap, especially when you tack on the extra licensing and hardware costs associated with offering table-side payments.

Maybe you’re already using a POS system that works, but every so often it’s worth comparing what you have to what’s available on the market now, especially the pricing. Many newer web-based POS systems charge much lower licensing fees than locally-installed systems and work on smart terminals and iPads so hardware costs are often lower as well.

So there you have it. Some simple but very effective ways for you to maintain your restaurant’s profitability as costs rise. Along with these tips, it’s important to constantly evaluate your strategy and ask if you’re staying relevant, if your diners are coming back, and above all if you’re creating a great food experience that puts your customers first.


Looking for new way to accept payments? We can help you grow your business with seamless payment, loyalty, and gift card solutions.


Discover Our Products

Katya Heckendorn

Katya Heckendorn

Katya Heckendorn is a content marketing strategist specializing in the fundraising space. She likes all things peanut butter and thinks dogs are pretty cool.