Your salmon dish costs you $8 more per plate than it did eighteen months ago and you haven't raised prices because you're scared of losing customers. I've helped restaurants navigate food cost inflation, and refusing to adjust pricing is how you go broke. Here's how to protect margins intelligently.
Calculate your actual food cost percentage right now, not what it was last year. Take last month's COGS (cost of goods sold) and divide by total food sales. If you're above thirty-five percent, you're in trouble. Most successful restaurants run twenty-eight to thirty-two percent food costs. Above thirty-five percent means you're subsidizing meals with savings, and that ends badly.
Raise prices strategically, not across the board. Your $28 steak that was $24 two years ago can become $32 without customers noticing much—high-ticket items have more pricing flexibility. But raising your $12 burger to $14 feels significant to customers. Spread increases unevenly based on price sensitivity and competition.
Adjust portion sizes slightly before raising prices on popular items. Customers notice a three-dollar price increase immediately. They rarely notice when your pasta portions drop from twelve ounces to ten ounces if the plate still looks full. This isn't deception—it's margin preservation. Every restaurant does this during inflation.
Reformulate high-cost dishes with less expensive ingredients. If your salmon dish uses eight ounces, drop to six ounces and add more vegetables or a larger starch portion. The plate looks equally full, customers stay satisfied, and your food cost drops twenty-five percent on that item. Most diners never notice the exact protein portion.
Remove your highest-cost, lowest-margin items entirely. That dish everyone loves but barely covers its costs? Cut it. You're not in business to break even on menu items people occasionally order. Keep profitable items, remove charity cases. Your menu should make money, not win popularity contests.
Negotiate with suppliers, especially on high-volume items. If you buy fifty pounds of chicken weekly, call three suppliers and ask for better pricing. Tell your current supplier you're getting quotes. Even five percent savings on your top five ingredients significantly impacts monthly costs. Suppliers give better deals to restaurants who actually ask.
Buy seasonal and local when it's genuinely cheaper. "Farm to table" sounds nice, but local isn't always cheaper. Sometimes it is—summer tomatoes from nearby farms cost less than shipped ones. Winter berries from local greenhouses cost more than California imports. Buy based on economics, not philosophy.
Reduce waste aggressively through better inventory management. Food you throw away is money in the trash. Track what you're wasting weekly. If you're tossing ten pounds of lettuce every week, order less. Waste typically represents three to five percent of food costs, and it's the easiest place to cut immediately.
Create specials from excess inventory before it spoils. Bought too many chicken breasts? Thursday special is chicken marsala. Zucchini about to turn? Zucchini fritters become an appetizer special. Converting near-waste into specials recovers cost and feels like smart kitchen management to customers.
Use menu psychology to guide orders toward high-margin items. Highlight profitable dishes with boxes or "Chef's Favorite" callouts. Place them strategically on the menu. Train servers to recommend high-margin items when asked. You can't force orders, but you can influence them toward dishes that actually make money.
Consider a small service charge instead of across-the-board price increases. A three percent "kitchen appreciation" or "operations" charge adds to every check without making menu prices look higher. Some customers hate this, but it's mathematically better than raising every menu item and looking more expensive than competitors.
Monitor competitors' pricing monthly. If every restaurant in your area raised prices and you're still at 2022 levels, you're leaving money on the table. If you're the most expensive in your category, you need to justify it with quality or cut prices. Know where you stand competitively.
Managing food costs, supplier negotiations, menu engineering, and strategic pricing while running daily operations is why many restaurants slowly bleed margin until they close. RestaurantDestinations.com directories connect customers with your restaurant, but sustainable pricing and cost management is what keeps you in business.
Quick Action Checklist
Immediate Assessment:
- Calculate current food cost percentage (COGS ÷ Food Sales)
- List all dishes with food cost above 35%
- Identify top 10 most expensive ingredients by monthly spend
- Review waste logs from last 4 weeks
- Get competitor menu pricing for comparison
Pricing Strategy:
- Raise high-ticket items ($25+) by 10-15%
- Raise mid-tier items ($15-24) by 5-10%
- Keep value items ($10-14) stable or raise minimally
- Update menu prices on website/online ordering same day
Menu Engineering:
- Reduce portion sizes on 3-5 high-cost dishes
- Reformulate expensive items with cheaper ingredients
- Remove 2-3 lowest-margin items completely
- Add high-margin items in prominent menu positions
Cost Reduction:
- Get quotes from 3 suppliers on top 5 ingredients
- Negotiate with current supplier (mention competitor quotes)
- Switch to seasonal ingredients where cheaper
- Audit waste daily for one week, identify patterns
Ongoing Management:
- Create daily specials from excess inventory
- Track food cost percentage weekly, not monthly
- Train servers to recommend high-margin items
- Review and adjust portion sizes quarterly
- Update menu prices every 6 months minimum