Determining a pricing strategy can be overwhelming, especially in an era of inflation and uncertainty in the macroeconomy. This has been especially true in the restaurant industry. In 2023, restaurants have faced a slew of challenges, from slower foot traffic to higher supply costs. However, some restaurants are defying expectations and actually earning healthy profits by harnessing the power of pricing analytics. With steady guidance, restaurant chains can use pricing analytics to distill the deluge of information into actionable insights and higher profits, as the author explains.
By mastering revenue growth management—ensuring that pricing, promotions, and menu offerings are all working together—US restaurants can serve up profitable growth, as the authors explain.
When building a high impact pricing strategy for a restaurant business, the goal is to optimize overall long-term profitability. The right pricing strategy, backed with the right model, increases overall returns by improving the complex interplay between guest count, menu design, and ticket size, as the author explains. Although focused on the restaurant industry, this article provides pricing strategy and best-practices that can be employed by pricers in multiple retail, consumer goods, and related industry sectors.
Brands in the food services industry have been losing margins because of the increasing cost of labor, transportation, and food, as well as COVID reduced traffic, which is why pricing is more relevant than ever. Many large, multi-unit restaurant brands procrastinate on pricing out of fear that an increase will be detrimental. This mindset creates a state of inaction, which is a mistake because pricing is actually the biggest lever in terms of maximizing a brand’s profitability, as the author explains.