Use Caution When Raising Menu Prices

Prices on everything just keep going up.

I was in my favorite breakfast spot the other day and they had raised the price on the dish I always order by 20 percent!  Now I could see maybe 5 or 10, but 20?  Naturally, that made me wonder about the other menu items, and sure enough, the proprietor had almost unilaterally taken his prices up a full 20 percent across the board.

Personally, I don't think this was a smart move on his part. I understand that food and fuel are on the constant rise. Your customer knows that too, the media see to that.

I clearly understand that the restaurateur has to try and pass on as much as he can. But there is a limit to how much the consumer will take in one deft stroke of the adding machine.

If you're thinking of raising your menu prices, here are a few things to think about first, before you do.
Firstly, get out and talk with your own customers. Spend some time here. Talk to them in the restaurant, in the parking lot and on the street in town. Do some research. If you have an emailing list, conduct a survey with a few brief questions about prices; have them fill out a very short (no more than five questions) survey while in the restaurant…just address the issue of prices — get right to the point — and keep it short.

Get some idea first of what your customers think…and feel. The assumptions you are holding about them won't necessarily be true. You may be surprised by what you find. What are the actual things (their points of pain) that are bothering them most about the menu prices, or dining in your outlet?

Try taking a fresh, new look at what you offer as 'value'. In times like these, people think in terms of the 'absolute price' not necessarily the overall value delivered. For instance, a 'bottomless cup' of coffee for $1.95, may appear too expensive, compared to a single cup for $1.25.

Try unbundling your menu items. People may have appreciated buying a grouping (e.g. sandwich, fries and a drink) in the past; but are now more interested in stand-alone items. This way they may be able to exercise more discretion with their pocketbook; while blaming it on their diet.

In summary, you can apologize for the 'uncontrollable price increases' (be sure to keep them modest and do it slowly); offer your most price sensitive customers some form of promotional 'deal' if you can. Most importantly, always emphasize your restaurant's benefits to the guest.

Observe the results and behavior of your guests. Pay very close attention to what they are now ordering, and follow up with them to get their opinions on your prices without making a big deal of it. Get some feedback as soon as you sneak those prices up a bit. Monitor the situation closely.