How Restaurants Can Continue to Create Value in an Inflationary World
Barbara Castiglia, Executive Editor of Modern Restaurant Management, shares insights into the restaurant industry and the current battle with inflation in today’s society. There are hard truths and facts that our society is facing.
Pew Research found through a survey that inflation is the top concern for Americans, surpassing other concerns such as crime, gun violence, and affordability of healthcare. Data allows businesses to learn how to make informed decisions using the information gained from current trends. “According to federal statistics, in a report from the National Restaurant Association, wholesale food prices inflation has risen 16.3% year to date; this is the highest inflationary environment since 1974,” said Castiglia. The inflation includes restaurants’ many food staples, such as eggs, butter, and beef.
While COVID-19 was a massive challenge around the globe, restaurants are coming up against two new obstacles: inflation and customer retention. Forbes expands on how customers not only face inflation with restaurants but also with gas, rent, groceries, and many others. “According to a poll from marketman, 69% are likely to order delivery less often, also looking to do things like skipping dessert to save money, skipping appetizers, ordering less food, ordering fewer drinks, and maybe even ordering dishes that they can share to reduce to reduce the overall bill,” said Castiglia. Overall, Americans are focusing on cutting down on food-based experiences and gas. A CNBC Momentive poll found that 53% of Americans are cutting back on expenses due to the rising prices. Likewise, inflation not only impacts the restaurant owners but customers are also feeling the impact on how much they engage in the restaurant experience.
Although many statistics are intimidating, there are still things owners can do to fight back against rising inflation rates. Restaurant owners can create value within their dining experience that will aid in producing a higher customer retention rate. Value in the context of the restaurant experience can also be making prices and the restaurant experience more reasonable for the daily consumer. Additionally, producing a diverse restaurant experience through meal kits or cooking classes may boost motivation to spend the extra money to go out.
Many restaurant owners may begin to think that making things more reasonable is easier said than done. Still, the empathy that owners can create within their restaurant experience can differentiate between a family that orders a big meal and a family that leaves after the appetizer. “You’re going through the same thing that they’re going through,” said Castiglia. Everyone is impacted by inflation during this time. Restaurants have an opportunity to not only give back to the community but can give customers a sense of belonging in the safe space they create through their dining experience.
