NRN executive editor Alicia Kelso joins the podcast to talk about restaurant menu pricing going into 2024.
As we face a new year, it’s perhaps time to have some difficult conversations. Chief among them: What should restaurant operators do about menu pricing?
Thus far, the 20-to-30% increases since the start of the pandemic have largely been justified to manage historically high inflation, rising labor prices and so forth. But most food costs have come back to earth, the supply chain continues to normalize, and grocery/supermarket prices have cooled materially. This confluence of trends seems to have put the restaurant industry in a bit of a pickle.
Striking the right balance on price has always been a challenge, and that has never been truer than in this current environment defined by high inflation/rising wages coupled with a consumer that has shown a tremendous amount of willingness to pay more. That said, plenty of signs indicate we’ve reached – and perhaps even exceeded – such willingness and clearest among them is ebbing traffic. The so-called “substitution effect” could manifest accordingly, if it isn’t already.