There are a number of challenges facing the foodservice industry as organizations navigate the post-pandemic “new normal.” Causing the greatest disturbance to operations today, however, is the unprecedented and continued global inflation. It’s resulted in increases to the price of just about everything, including restaurant menu items.
The producer price index for food manufacturing was up 14% year over year from January 2021 to January 2022. Full-service menu prices are up by almost 9% year over year, inflation has hit a 40 year high, and operators are planning more increases because they’re still not recovering lost profit margins. And this is all on top of rising labor prices and major supply chain delays and shortages.
According to industry expert George Minakakis, it’s a situation that requires organizations to prepare their staff in order to properly meet customer needs.
“Consumers who frequent restaurants will notice pricing changes that are currently happening pretty much right across the board,” he says. “In fact, you would be surprised how many people will even notice a five-cent increase on a cup of coffee. What this results in is undue strain and stress on restaurant employees, particularly frontline staff, who are burdened with conveying, almost justifying, the menu increases to customers. The key in addressing this issue, and in preparing staff to be able to do this most effectively, is to ensure clear and strong communication with them.”
But if done properly, Minakakis says, if the internal message is managed, then the customer story will be managed as well. It’s a concept that he’s developed throughout his extensive leadership career within the retail and foodservice industries, which included working as Franchise Business Development Leader at what is now YUM! Brands – the Fortune 1000 corporation behind KFC, Pizza Hut, Taco Bell, The Habit Burger Grill, and WingStreet.
The idea of managing this internal message starts with providing restaurant employees with the information and understanding necessary to do their jobs with confidence.
Here are Minakakis’ top 5 ways to prepare restaurant employees when you raise menu prices.
1. Educate your staff
The first thing to do, advises Minakakis, is to educate staff concerning the reasons why prices are increasing. And, in order to ensure adequate transparency, he urges owners and managers to be honest about the reasons. It will arm staff with the knowledge they’ll need when responding to inquisitive customers.
“Let your employees know that inflation and cost increases are a global phenomenon that everyone, everywhere, is trying to work through. Explain that the adjustments that have been made have been done as reasonably as possible, highlighting exactly how much the price increases are and for which items on the menu. The more they know, the more effectively they’ll be able to manage the customer story for the brand,” he says.
2. Focus on continued value
Minakakis explains that in order to continue satisfying customers in light of menu price increases, a renewed focus on the value the organization offers should be underscored whenever possible.
“It’s no secret that recent increases to menu prices are, in most cases, simply meant to offset cost and ensure the same, if not greater, level of service and quality,” he says. “So, staff should be encouraged to focus on the value of the incredible service that’s provided and the amazing menu items that everyone enjoys. When the customer sees that service levels are maintained and that they can still enjoy their favorite meal, price increases for many quickly becomes a non-issue.”
3. Empower restaurant employees to provide options
Many customers will be curious to find out how long increased prices on the menu might last and if they might lower in the future. Minakakis suggests that restaurant owners and managers keep employees updated concerning the situation, including near-term plans. Understanding the current state of the market helps employees confidently answer these types of questions from customers. And, he adds, it’s actually a situation that provides frontline staff with the opportunity to become creative in the options that they offer customers.
“Employees have got to be aware of the restaurant’s plans with respect to pricing. A common inquiry over the course of the next few months will be whether or not pricing is going to come back down. Empower your staff, letting them know that it’s currently unclear whether prices will come down or not and that their message should be around uncompromising quality. Employees can explain to customers that in spite of price increases, the restaurant is always looking for ways to lower costs and offer greater options in order to deliver the value they seek,” he says.
4. Prepare restaurant employees for angry customers
Angry and belligerent customers unfortunately come with the territory for anyone working within a customer-facing position. Minakakis says that it’s vitally important for restaurant owners and managers to not only prepare their staff with respect to explaining the price increases to customers, but to also ensure that they are ready to address negative questions and responses from angry guests.
“It’s probably one of the worst challenges about working within the foodservice industry. You’re not always going to please everyone. And, sometimes, people are going to get upset,” says Minakakis. “Restaurant employees dealing with the public need to be reminded to reiterate the reasoning for the price increases in these situations, explaining that the restaurant is dealing with the same market changes and inflation as everyone else. And, make sure that everyone reinforces the same message, maintaining consistency in communication.”
5. Make the visit about the experience
Minakakis points to pent up consumer demand for experiences as a great way for many to highlight the value in dining out. He says that by doing so, you’ll not only keep customers satisfied, but will also invigorate the brand and increase positive engagement with customers.
“It’s obviously incredibly difficult attempting to explain the reasoning behind increases to menu items. And, it also tends to distract from the real value in eating out with family and friends. It’s about being out and away from the house and in hospitable and friendly surroundings. It’s always very much been about the experience. And restaurant owners and managers should make sure that the experience, and the excellent service that helps support a great one, becomes the focus. When you make your guests feel welcomed and appreciated, you’d be surprised how quickly they’ll forget about menu price increases,” he says.
The need for most restaurant owners to raise prices on at least some menu items is becoming an inevitability. However, as Minakakis points out, doing so does not at all mean that service, quality and a satisfied customer needs to be sacrificed. On the contrary, given the current economic climate and market conditions, it might be the ideal time for restaurant owners to become creative in finding ways to enhance the service they provide and quality they create in order to enjoy continued growth and success during these challenging times.