How to Explain a Restaurant Price Increase
The prices of menu items in your restaurant are one of the factors that determine the profitability of your business. Customers come to expect certain price points at different eating establishments. For example, a fast food restaurant generally prices food lower than a full service restaurant and much less than an upscale gourmet restaurant. No one seems to mind a decrease in prices, but an increase is another story. Customers don't particularly care why you increased prices. Their concern is that they have to pay more.
Not all ingredients are created equal. Justify the price increase by explaining that the ingredients have changed. For example, chanterelle mushrooms cost more than white button mushrooms. Use a few chanterelle mushrooms as well as white button mushrooms in the mushroom risotto, and you can increase the price. Customers might be more willing to pay for more expensive or unusual ingredients if they have an air of exclusivity around them.
An alternative to increasing the price for a menu item is decreasing the portion size. With proper plate and garnish adjustments, customers might not even notice that the size is smaller. For example, carpaccio is thinly sliced filet mignon served raw. The cost of the meat varies depending on beef prices. Rather than overlapping the slices by 50 percent when plating, overlap them by only 25 percent so the plate appears more full. It sounds counterintuitive, but increasing the price and the serving size is another way of explaining the price increase. The trick is to increase the serving by, say, 10 percent, but the price by 20 percent. Add lower-cost ingredients to bulk up the dish. Adding more lettuce to a Cobb salad makes it look bigger, but doesn't add substantially to the cost. When customers ask why the price increased, explain that the portion size increased.
Restaurants that depend on local products, meats, cheeses, seafood and produce have the option of explaining the price increase based on what's in season. For example, fiddleheads -- a vegetable available for a very limited time in the spring -- will cost more at the beginning of the season and at the tail end because supply is limited at those times.
Ease into an overall price increase by taking a few items off the menu and offering them as specials at a higher price. Customers will remember the latest prices. After the dish has been off the menu, add it back at the higher price. Change the dish's presentation by including a different sauce or garnishes. If customers ask about the price increase, explain it by saying the dish has changed.
Menus can be priced a la carte -- each item priced separately, from soup to side dishes to the entrée --- as opposed to by the meal, with the price for dinner including salad or soup, the entrée and side dishes. Sandwiches are often served with coleslaw or potato salad and priced together. Changing from one type of pricing to the other not only can be an explanation for the price increase, but it also helps hide the price increase as well.