As the summer season carries on, gas prices continue to skyrocket. Transportation costs affect business owners in many ways, especially those running a restaurant. Every meal comes with hidden costs that can add up over time. So it’s important to know how the economy can affect your restaurant, and what you can do to keep your business in the green.
Cost of Goods
Food wholesalers will most likely raise their prices as the cost of transporting goods increases. According to Commercial Carrier Journal, "truckers are paying at least $3 per gallon in all regions across the country for the first time in over three years."
This increase in the cost of fuel will drastically affect the cost of delivered goods.
Businesses with delivery services will especially be affected by the rising cost of gas. On the bright side, the higher gas prices will also increase the number of delivery sales. People are more likely to stay home and have the food brought to them, rather than spend the money on gas to go get it.
Our company, GWT2Energy, helps guide growing restaurants to increase profitability. An article in our blog explains how "delivery expands availability to a larger potential customer base who either can't or don't want to leave their home or workplace." This could be a way to help balance out the dent in sales caused by rising gas prices.
It might cost a little more to deliver, but the demand for it will increase so a rise in delivery fees will be justified.
When budgets start to get thin, one of the first things consumers tend to cut back on is eating out. They stay home more often to try and stretch what resources they have.
Now, this will affect all types of restaurants, but especially fast food. Higher gas prices mean less driving, and less driving means less business for the quick service restaurants conveniently located on highways to attract motorists.
Increase in Menu Prices
As the cost of delivered goods increases, restaurant owners will have to find a way to balance the increase in cost. This usually means increasing the prices on the menu. Unfortunately, as menu prices increase, customer rate decreases. Some people just aren't willing to pay that extra dollar or two.
There are ways to balance this increase in cost without raising menu prices. Consider offering smaller portions.
"If you have several plates coming back to the kitchen with food still on them, then you need to re-evaluate your portions. In fact, cutting back on the portions without changing the cost of the meal can save you a bundle. (Source: GWT2Energy)"
If you’re worried about the effects that rising gas prices will have on your restaurant this summer, GWT2Energy Consulting Services can help you set up an energy management plan and find solutions that can save you up to 25% on your energy costs. We can help you increase profitability, and make sure your restaurant is running as efficiently as possible.
Contact us today for a free consultation!