How restaurants are adjusting their menus to stay viable

Confronted with labour shortages, inflation, supply-chain stretches, and other operational challenges, restaurants are having to find a variety of ways to adjust their business model to stay attractive to consumers and stay viable within a competitive industry. Many of those changes have come on menus.

Toast’s first Voice of the Restaurant Industry survey found that one-third (around 32 per cent) of existing restaurants said they faced extreme or moderate hiring challenges this year, which climbed to 44 per cent for new restaurants. These challenges impacted most restaurants and were especially difficult for new restaurants that had to staff from the ground up. 

Restaurateurs have tried to find relief in several ways, found Toast. One main channel was via the menu.

Four in 10 (39 per cent) of the restaurants surveyed started tracking the price of key ingredients, 36 per cent increased their menu prices, 30 per cent substituted lower-cost ingredients onto their menu, and 31 per cent reduced their menu offerings altogether.

That practice of streamlining menus has been seen for more than two years now in some forms, initially being introduced as a safeguarding measure against the economic effects of closures and restrictions during the pandemic.

In reality, many of these restaurants will likely have undertaken several of these measures over the course of recent months, facing the unfortunate reality that their previous operations are no longer viable.

The soaring inflation that has characterized recent months has increased the price of everything from flour to vendors. Restaurants have not only been tweaking their menus in response but also their own sourcing methods: 38 per cent adjusted the number of food suppliers they used and 34 per cent reduced their overall purchasing or inventory.