As restaurants continue to deal with rising food costs, inflation is affecting the menu. Consider the month of June, when the low supply of chicken wings and rising costs prompted Wingstop to launch a virtual brand called Thighstop, replacing the wings for the thighs.
read more: Wingstop’s new virtual brand ‘Taistop’ turns chicken shortage into an opportunity
While this may be a particularly dramatic example, many restaurants are making similar changes on a small scale, monitoring food costs to focus on menu items that make more sense from an economic standpoint.
James Marks, co-founder and operator of Capitol Texas, a fast-paced Tex-Mex restaurant chain in Florida, spoke with PYMNTS about the challenges posed by skyrocketing inflation and how restaurants can imagine minimizing impact. .
“I’m no longer the youngest person in the room, and I’ve never seen anything like it,” he said. “I don’t know many people who have. [Inflation is] Affects everything. … We need to look at individual parts of our business, all day, every day. … Now, you can’t configure your menu and forget it. … You set up your menu, and then you look at your suppliers and decide what changes you need based on each recurrence.
The Consumer Price Index (CPI) of the US Bureau of Labor Statistics (BLS) found that in February, home-cooked food (ie restaurant food) prices rose 6.8% compared to January 2021. , And it was 0.4% higher than last year. Month
In fact, these figures, which pay the customer, do not fully reflect the inflation that restaurants experience, as many restaurants may have absorbed some of the increase in costs.
For the capital, Tycos, for example, Marcos said, “We’ve got a lot of it.”
Other food categories saw even higher inflation, with February food prices rising 8.6% year-over-year and 1.4% month-on-month. In addition, CPI stated that total inflation for the month reached 7.9%.
See also: The highest rent-buying customers in 40 years go to big-name brands
Marx said he believes the numbers in the public record do not reflect the challenges that restaurant operators really face.
“I highly doubt that the official rate of inflation is even close to the real effect that everyone is feeling,” he said. “A particular protein that we’ve been buying for five years, I think, 30 30 a case. Last week, that one case was $ 124. So, from 30 to 124 – that’s not 7.9%.
Small businesses in the United States are feeling the effects. A study from the PYMNTS March study, “The Main Street Economic Health Survey: Navigating Economic Uncertainty”, co-produced by Millions, found that 54% of Main Street businesses are concerned about the barrier to inflation. And 23% think so. This is the only major challenge right now.
Get the study: Main Road Economic Health Survey
Possibilities and permissions
Marcos noted that given the highly volatile nature of inflation at present, some foods have become dramatically more expensive and others less effective, there are opportunities to reach the restaurant menu that the company generally wants to raise prices. Stop.
“The positive side of it is that for us, and I think for everyone, not everything is moving the same way. [time]”It was a very complex game like six-a-side chess,” Marcos said.
He noted that the company monitors commodity prices, as well as offers specific food items that are not affected by inflation. He added that the China Research and Development (R&D) team has a backlog of ideas. Similarly, the company can “toggle” these ideas with this week’s prices to offer the cheapest items.
In addition, by using digital menu boards to emphasize these foods, the company can further promote the sale of highly marginal friendly products on offer.
“Now it’s like, ‘Let’s show everyone how to eat these five things because they’re at a reasonable price right now,'” he said.
Marx noted that the challenges of inflation have encouraged the company to be more proactive than in previous years in seeking predictions about future market changes. He explained that he had emailed suppliers to inquire about their wishes and to consider this information when making plans for the future.
“For me, what’s not commendable is that we have so much potential to manage this in the restaurant business as far as it looks,” he said. “But it’s not easy, and it’s important to be smart, it needs to be analyzed, and it … takes the lead at the moment. [lower-cost] Things people like.