inflation

Restaurant transparency is crucial as inflation continues

As Canadians continue to face record-breaking inflation, the term shrinkflation has emerged, reflecting when the prices rise or remain the same but the portion or serving size is reduced. This has affected many restaurant menus and diners who might be paying more for less, as operators try to recoup costs and stay afloat.

Shelflation is also occurring, which is when the shelf life of certain items is shortened due to supply chain disruption. This often affects the quality of produce and restaurants need to take shortened shelf lives into account when planning and executing menus. Food waste is not a new challenge for the foodservice industry, often a result of surplus inventory, but shelflation makes it even more difficult for operators to manage their fresh ingredients, putting pressure on them to use up ingredients that now have a shorter shelf life.

Now we are seeing skimpflation, which experts describe as discreet modifications made to the formulations of certain foods, often affecting the nutritional values. In an effort to address the inflated ingredient costs, some companies are switching traditional ingredients for more cost-effective options, often without customers even knowing.

This practice does occur commonly, as manufacturers seek to make adjustments and improve their products, so it is not merely an effort to cut costs, but the practice could be happening more frequently with the continued inflated prices. Restaurants need to be aware of these changes as they incorporate these ingredients into their dishes, modifying their nutritional information where necessary.

Studies show that 50 per cent of restaurants are operating at a loss or breaking even, so the issue of ongoing rising costs, shorter shelf lives, and smaller portions are things that diners are becoming aware of and are looking for as they seek better value from their favourite restaurants.

But there’s good news: reports show that July’s food inflation dropped to 7.8 per cent and increased restaurant prices went down from 6.6 per cent to 6.1 per cent. So, with inflation slowly decreasing, there will be more opportunities for the foodservice industry to focus more on business recovery.

As consumers become more cost-conscious in today’s economy and spend more time looking at labels, ingredients, and portion sizes, it is important for restaurants to stay transparent in their effort to provide value while protecting their margins.