Report: 31% of restaurants have reduced menu size due to inflation

Dive Brief:

In response to inflation, 39% of restaurants started tracking the price of key ingredients, while 38% have adjusted the number of food suppliers they use, according to a Toast survey of 956 restaurant professionals.
In terms of the impact on menus, 36% said they have increased pricing while 31% reduced their total menu offerings.
As restaurants face increased costs across the board, many have turned to technology to better keep track of inventory and ingredients, Toast said.

Dive Insight:

From beef to flour, restaurants have been facing increased food costs during the last few years. While menu price hikes are the most acute way to offset these costs, restaurants have been responding with other tactics as well. Chipotle began testing radio-frequency identification technology to improve traceability and inventory systems earlier this year. Several chains, including Wing Zone, White Castle and Jack in the Box, have been testing robotics and automation to help reduce labor costs as well.

Outside of technology, restaurants have been picking wholesale suppliers that can provide one-stop shopping across all of their food and goods needs. Toast’s survey revealed 30% of restaurants are already substituting lower-cost ingredients in their menus.

Other tactics include focusing on items that aren’t as affected by the supply chain, such as local ingredients, according to Talk Business & Politics. With shipping costs rising, the price difference between national commodities and local products could shrink. Restaurants should also be stocking up on non-food supplies like takeout containers when they find a low price, Brian Warrener, a professor at Johnson & Wales University, told Talk Business.

Despite employing these strategies, many restaurants continue to struggle with sales growth. About two-thirds of small restaurants surveyed by Seated have seen sales declines. However, diners haven’t stopped eating out, and consumers are spending 40% of their food budgets on restaurants, according to a May Popmenu survey.