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  • Writer's pictureMaya

Why Are Menu Prices Getting Higher?

Menu Prices on the Rise

During the COVID-19 pandemic, food service took a bigger hit, financially, than many other industries. Yet even now as they start to recover, their troubles haven’t gone away. If they can’t afford the rising costs, it gets passed down to the customer via higher menu prices.

Where are these rising costs coming from? In part, issues abound higher up the supply chain. Production can’t necessarily meet the newfound demand as customers flood back out to restaurants. When they can’t supply everything, restaurants run into inventory issues. They then have two options: Take it off the menu, or reduce portion sizes to try and stretch reserves to as many customers as possible. Either way, it impacts overall satisfaction.

Food costs rose since last year, and menu prices are higher than they’ve been in awhile. Restaurants have to handle many new expenses while still contending with financial difficulty caused by the pandemic, as well as all the usual costs that thin restaurants’ profit margin even in good years. That then reflects in higher menu prices.

restaurant menu

What Will Restaurant Recovery Take?

During the pandemic, certain food service channels thrived. Takeout became very popular, as online ordering was a fast and convenient way to support local restaurants. To-go alcohol was a major part of that. While some states passed laws to extend their temporary rules allowing the sale of to-go cocktails, restaurants can rely on thriving channels like these instead of risking decreased customer satisfaction when they raise prices.

But restaurants don’t only have to deal with supply chain holdups. The labor shortage continues to pose a threat to recovery. Workers are stretched thin and unable to handle the new influx of customers eager to spend time with friends this summer. In some cases, restaurants may need to raise their menu prices just to pay all the workers necessary to meet growing demand. However, putting the onus on the customer can result in decreased satisfaction, which can have a negative effect on retention, new customer recruitment and, thus, profit. Restaurants need to decide where they can cut costs and what they can afford to pay in return.

Manage Menu Prices More Easily

No matter what choices your restaurant makes with its menu, swiftness and efficiency are critical. Along with their other capabilities, smart Point of Sale systems can swiftly build menus for specific service times, special occasions, happy hours and more. They disseminate updates to every device in the store, in real time, to prioritize accuracy. Plus, customers’ push for digitization makes mobile menus a smart option anyway.


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