To expect a restaurant owner to lower prices in the wake of growing inflation might appear sound and well-reasoned, but take a second to reflect about this for a minute. When, for instance, the price of gas goes up by an unrealistic 200% -let’s just say- isn’t it reasonable for a supermarket business to increase the price of a loaf of bread from $1 to $2? Examples of justified price increases abound everywhere you go, there is just no escaping it. However, the same supermarket in our example can instead buy its own trucks and cut out the middleman completely as a drastic cost cutting measure. This all goes to show that price regulation is more than just about our perceptions as consumers, but more about what the seller can do to cap prices. Restaurants are no exception, more so because our society has developed a culture of eating out, so why stop now, simply because the restaurant menu prices are high? Certainly no, as change is on the horizon.
Going Down A Slippery Slope
The restaurant business has always been a tricky niche to invest, complicated actually. A badly prepared meal can drive away a customer for good, a competitive start-up opening just around the corner can lure away your once loyal clients with its vibrant new look, and something as seemingly harmless as an honest mistake by a waiter can spread like wildfire by word of mouth and tarnish your goodwill. So some restaurant owners –in an attempt to make-up for lost visitors- turn to increasing their prices. Fair enough, but that too can trigger a ripple effect and cause more customers to lose interest. This works for some, but not for everyone. On the other hand, some people opt to make up for lost customers by lowering prices, but the question is how.
Outsourcing: A Change Of Perspective
More often than not it all boils down to outsourcing. The different sources from which raw food products are bought determine –to a large extent- the eventual price, that is, location and star rating aside. A restaurant should consider switching suppliers if even the slightest possibility of cutting costs exists. Another worthwhile consideration would be for restaurant owners to carefully scrutinize its invoices and check for overcharging. Suppliers make mistakes all the time, but don’t let this happen under your watch as small mistakes cost money. When you realise that more than 30% of restaurant invoices billed by suppliers contain one mistake or more you might begin to see the truth in what I’m saying.
Whilst it may require a little ingenuity on the part of the proprietor, capping prices and cutting costs is possible whilst making a profit at the same time. But most of all, what is important to remember that shady means like eliminating the 15% tip that is payable as customary practice and adding that to the meal cost won’t cut it. A regular tipper may not take offense, but trust me, other people will notice a $5 increase if they visit your restaurant often. So be careful not to bark up the wrong tree and chase customers away.