Helpful ReplyMenu prices

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DWags541
Cheeseburger
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2012/02/26 21:30:44 (permalink)

Menu prices

Was just thinking today about the rising gas prices. Of course, if you've been in business the last couple years, you know food prices have also gone up.
I was wondering if anyone is considering raising their menu prices and if so, what kinds of considerations do you make to the timing and amount of increase?
 
Unfortunately, I don't think anyone buying our food is making more money today than they were a year or two ago. Times are tough for everyone. Tough call.
 
-Dave
 
#1
freebookings
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Re:Menu prices 2012/02/27 11:08:12 (permalink)
There was recently an interesting Bloomberg article titled, "Get Ready for Higher Restaurant Prices", that shed light on strategies some restaurants use to raise prices. Here is an excerpt:
 
Restaurants are poised to raise prices as Americans become accustomed to more expensive food at grocery stores.U.S. consumers paid 2.6 percent more at eateries in September than last year, while food prices at supermarkets were 6.2 percent higher, according to the Bureau of Labor Statistics’ monthly consumer-price index. Inflation for eating at home has accelerated faster than dining out during the past year, reaching its widest gap since 1990 last month.Restaurants monitor this differential because they don’t want to appear too aggressive with menu pricing relative to the cost of food at home, said Jeffrey Bernstein, an analyst with Barclays Capital in New York. This gives companies “more credibility” in adjusting prices, particularly as commodity inflation puts pressure on margins, he said.“If people go to the supermarket and see that the core items they’re purchasing are on the rise, then they are less likely to be surprised if restaurants are raising prices as well,” Bernstein said.
#2
Dr of BBQ
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Re:Menu prices 2012/02/27 11:32:20 (permalink)
1 year ago over a period of about 3 months my beef and pork prices went up 30%, they are still at that point and remain steady. About 6 months ago I raised all my prices. As soon as I did two of my competitors dropped their prices by about 20%. One went out of business last week.
 
It's a tough business climate and it won't get better for awhile. But it's always better to raise prices a couple times a year by a small percentage 25 or 50 cents than once a year in a big jump. 
 
jack
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DWags541
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Re:Menu prices 2012/02/28 01:46:04 (permalink)
Often times I compensate by raising prices at seasonal festivals rather than at my daily cart. I have seen event fees rise, in some cases at unreasonable rates. Not sure if its because of greed, or maybe they just started low getting into the game, or I am sure there are lots of expenses to running an event. But there is also something to be said about sustaining the vendors that pay your bills and feed your crowds.
Anyway, to me, it seems easier to pass on these rising costs to patrons at these events rather than daily customers who may be on the fence about eating out for their lunch break in the first place.
I think lots of mobile vendors like to keep their pricing simple, often in increments of a dollar, or .25 or .50. So, sometimes price increases are not as subtle as we'd like.
Additionally, it is difficult to transmit the depth of reasoning in which you make your decision to your customers in just a short interaction. But maybe like the Bloomberg article says, if you do it at the right time, they'll get it.
 
 
Dr of BBQ

1 year ago over a period of about 3 months my beef and pork prices went up 30%, they are still at that point and remain steady. About 6 months ago I raised all my prices. As soon as I did two of my competitors dropped their prices by about 20%. One went out of business last week.

It's a tough business climate and it won't get better for awhile. But it's always better to raise prices a couple times a year by a small percentage 25 or 50 cents than once a year in a big jump. 

jack


#4
CCinNJ
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Re:Menu prices 2012/02/28 06:15:21 (permalink)
I saw your pics in the gallery. They look great! I could go for some soft-serve right now!

What are your available vegan options as far as including fresh seasonal toppings...sides (included with entree & or for additional $) condiments with a little flair?

Seasonal fresh inexpensive ways for you to take x and make it xxx in value for your customers....without much additional cost.

Most daily customers will notice if for example a grilled cheese sandwich goes from $2.25 to $2.50...when it just reads as a grilled cheese sandwich...period (with no descriptives defining and framing the elements of the ingredients - pleasing textures - prep etc. of the sandwich.
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RodBangkok
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Re:Menu prices 2012/02/28 06:50:00 (permalink) ☄ Helpful
Monitor your close competitors pricing
Monitor the big fast food chains pricing
We monitor two large pizza chains, McD's and KFC
How to monitor, just pick a standard item and check its price every month, put it in a simple spread sheet and you have some history.Then compare your price and profit for the same time period.  Adjust your prices accordingly, as if your competitors and the big guys are going up..or down you need to be in line.
Have some high profit items combined with low profit but popular items as specials.  Foo Foo coffee with a breakfast burro say, cut the high profit on the drink while keeping your margin up on the higher ingredient costs of the burro.
Always be looking for ways to cut cost and increase quality, its a never ending battle that will go on for as long as your in business.  If you understand that and keep working toward lower cost and higher quality it will never let you down.  Complacency is one of your worst enemies.
#6
Bistro a go-go
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Re:Menu prices 2012/02/28 09:03:09 (permalink)
i think make light of the price increase and call it what it is. increase your prices to reflect the 5% or .50 and put disclaimer at the bottom of your chalk board menu.
 
"The updated menu prices reflect a fuel surcharge thats passed onto us from OPEC, Shell, Chevron, and Citgo. Its important that we all do our part to make sure their share holders realize a great quarterly dividend and continued prosperity in troubled times such as these. Our chef's do not have control over these increases and please call customer service at 1-800-chevron to voice your opinions of our menu's price increase.  thanks for understanding. mgmt
 
another thing is our seasonal menu items. highlight seasonal items as these items are cheaper fresher and local which saves on fuel and lets customers know your eco conscious, ie sustainable local produce or proteins.
post edited by Bistro a go-go - 2012/02/28 09:09:13
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