Many operators have nudged menu prices higher to keep pace, but that risks deterring visits or shrinking orders as consumers grapple with their own rising costs.

By Joe Lombardi From Daily Voice

From fryer oil to filet mignon, the tab for running a restaurant keeps climbing, and fewer diners are picking up the check.

Operators say higher prices for ingredients, wages, and essentials like packaging are colliding with softer customer traffic, making profitability harder to maintain. 

Supply chain hiccups continue to cause delays and last‑minute substitutions, pushing up costs. 

Fuel is another pressure point. According to NerdWallet, the average price of a gallon of diesel has risen about 22 percent since 2020. 

This increase raises expenses for operating farm equipment, shipping goods from fields to markets, and ultimately drives up the prices that suppliers charge restaurants.

The math is unforgiving. With typical profit margins hovering around three percent to five percent, even modest increases in inputs can push a business into the red. 

Many operators have nudged menu prices higher to keep pace, but that risks deterring visits or shrinking orders as consumers grapple with their own rising costs.

According to Back of the House, there are several ways restaurants can cope with the rising costs:

  • Analyze item profitability and spotlight dishes that deliver strong margins while trimming slow sellers that tie up inventory. Some operators are testing dynamic pricing — adjusting prices based on demand, ingredient availability, and production costs — to protect margins without blanket increases. 
  • Reduce food waste: Advanced inventory and waste tracking can pinpoint overstocking, prep inefficiencies, and oversized portions. 
  • Adjust prices without losing guests: Instead of across‑the‑board hikes, phase in small increases, and upsell paid add‑ons (like premium toppings or sides) to lift check averages while limiting sticker shock.

Bottom line: With input costs elevated and traffic under pressure, the operating environment remains challenging.