Is There a Right Way to Raise Prices?

Due to many factors including inflation and supply chain challenges, restaurant owners and operators have been faced with tough choice about raising menu prices. Modern Restaurant Management (MRM) magazine asked restaurant industry insiders for their insights on whether there is an effective way to raise menu prices, any alternative and how can you do so without alienating guests.Ben Johnston is the Chief Operating Officer of Kapitus

As food prices rise, restaurants should try to stay within their target ratio for food cost to gross food revenue in order to maintain target profits. To do this, restaurants will either need to use lower cost food items or raise menu prices.  It is also important to manage labor costs to a target percentage of gross food revenue.  One way to lower food costs is to purchase more unprocessed foods, which require additional preparation labor.  However, a restaurant must be careful not to replace food with additional staffing expenses that outweigh…