According to the 2022 State of the Restaurant Industry Report, 90% of U.S. operators report higher food costs than in 2019, 80% state that they have higher labor costs and 60% have been experiencing higher occupancy costs. Not surprisingly, 80% of operators report that their profits are down from pre-pandemic levels.
The burning question is what to do to increase (or in some cases achieve) profitability given that costs have increased?
The perceived fairness research that we talked about in the first part of this five-part series on pricing indicates that customers believe that companies are entitled to make a fair profit, but in return that customers should get a reasonable price. Based on this, the researchers found that customers are fine with companies increasing their prices w
hen costs go up.
This sounds good, but how should you go about this? Luckily, there have been some other interesting studies that help shed some light on this.
Here's the link to the article.