Pricing is always a tricky affair, since many consumers today look at the price tag first before even thinking of whether to bring out the wallet or not. If you are a small restaurant, however, raising menu prices will sometimes be a necessity just to keep your establishment up and running. The cost, however, is the possibility that you will be driving consumers away, who are also experiencing financial difficulties of their own.
Pricing. If you think that you need to raise the prices in you menu, start by evaluating the ingredients that are used in your food products. Look at the food that are overpriced and try scouting for replacements. Ask the marketing officer in your restaurant to check out other markets and shops that may offer the ingredients for a smaller price. Also try purchasing nonperishable items in bulk, in order to reduce the cost of the products. If you have a supplier, try to negotiate the pricing and try to get information about the pricing that the supplier will enact in the next year. Tell your supplier that you have a tight budget and that you cannot accommodate sudden price hikes.
Value menus. If the prices of basic ingredients simply have risen no matter where you look, the next step is to create a value menu, where you can place the meals that can be cooked without using more expensive ingredients. You can also add meals that have smaller serving portions in the value meals. Keep in mind, however, that customers will notice if a meal has suddenly shrunk in size. Although smaller portions in the value meal menus are acceptable, make sure that the serving sizes will still be enough to satisfy a customer.
Explanations. Small restaurants usually have a loyal base of customers. Because you generally know who your customers are, try creating a letter where you explain to your customers why you have decided to raise the prices in the menu. Try to be sincere but not too dramatic. Simply try to show the customer that the price increase is not something that you want to do, but is the result of general increases in the price of basic commodities. This will not only help consumers understand your menu price increase, but will also give the customers the feeling that you sincerely appreciate their choice to dine in your restaurant.
Patronage appreciation. Also, during the two weeks before and after the price increase, try to be present in your restaurant as much as possible, especially during the peak hours such as lunch time and dinner time. Personally thank the customers for patronizing your restaurant, and try to explain briefly and concisely why the restaurant has changed its pricing. If you are not available, at least instruct your staff to explain the situation to the customers and to be more pleasing than ever. Good customer service can sometimes compensate the price increase.
With these steps, you should be able to raise the menu price in your restaurant while maintaining a stead client base.