Restaurant chains face an unusual challenge: Labor costs are rising, but traffic is falling, meaning if they raise prices to maintain their margins, they risk losing customers.
This week’s edition of Restaurant Business' podcast, “A Deeper Dive,” features Mark Kelnhofer, president and CEO of Return on Ingredients, a management consulting company that works with restaurants on recipe costing, menu engineering and benchmarking to improve profitability.
Kelnhofer talks about the challenges restaurant chains are facing as they walk the menu price tightrope.
Restaurant companies have to recover margins as labor costs increase due to competition for workers and minimum wages. But that can turn off customers at a time when choices are plentiful and consumers are dining out less.
Kelnhofer works with companies on reducing costs and increasing profitability. He discusses ways restaurants can head off their cost challenges before resorting to broad-based price hikes.
Please have a listen.