From the Editor: Price-raising strategies

Have you raised prices at your pizzeria this year?

When we look at how the restaurant industry is doing overall, things often look rosier than they are because dollar sales have risen but not overall unit – individual product or pizza – sales.

It’s never an easy choice but with sky-high ingredient costs, problems getting your preferred supplies and not enough staff to do the work, these days it’s a necessity for many. 

There are a few creative options. Shrinkflation – shrinking portions without raising prices – is one way to go. Customers are used to seeing this in the grocery store and it is a relatively painless way to recoup some costs. Or shrinking your menu choices, as so many are doing, to help prevent waste and make the kitchen shift more manageable.

Some operators have become good at the upsell, offering tempting add-ons. 

Toronto hospitality leadership coach Matt Rolfe, speaking at a Restaurants Canada Show, suggested raising prices during your peak hours. If your Friday nights are always busy, why not take advantage of that built-in traffic to make small changes that can have a big impact on your bottom line.

Some operators raise prices strategically, for example, increasing most prices but still offering some specials to keep return customers happy. To do this it’s important to analyze your sales data and food costs. Others are bumping up prices across the board.

But how do you do that without alienating your customers?

Many restaurant experts say it’s important to be transparent and up front with your customers – but they differ on whether you should warn guests in advance or simply answer honestly when asked after the fact.

Whichever route you choose, be specific about costs that are rising. High prices on cooking oil, for example, are a challenge for many, forcing them to choose between a lower-priced and usually lower-quality product that will may behave differently and definitely change the flavour of your menu. 

Good storytelling is in the details. Whatever is keeping you up at night, tell that to your customer. It will become part of your pizzeria’s story.

The price of printing menus used to be another obstacle to raising your prices. It is less of a consideration now that most restaurants have adopted online menus and encouraged the use of QR codes.

In Is There a Right Way to Raise Prices? by ModernRestaurantManagement.com, Rick Camac, executive director of industry relations at the Institute of Culinary Education, shared wisdom on this topic:

“When you have to raise prices (based on inflation, staffing and supply), you must still offer value to the diner (or at least the perception of it). While you can proactively make mention of the fact that prices just have to go up (whether in writing or in person), I feel, to a degree, that may “fall on deaf ears”, as has been my experience (as both a consultant and operator).”

Camac suggests several strategies to minimize the cost increase: Get some new bids on your menu and supply staples. Add more inexpensive items to a composed dish. Shorten the menu, allowing for less waste, fewer purchases and less labour. Mix those lesser priced items and lesser costing items into your menu, so that it’s not only higher prices your customers see (for example, take away an ounce of protein and add a few ounces of carbs). Check your competitors’ pricing. 

And finally, be ready with messaging for when a diner questions prices. Be honest (but do not advertise it). Be reasonable in your increases and stand by your decisions.

Whatever you decide, have a great summer season and remember the joy and relief you bring others when you do the cooking. There is real value in that!