Summary
Commodity price increases will hit both large and small restaurants hard. The key will be how they respond. The logical response is that they reduce portion sizes. Portion sizes are already overwhelming and food waste is business cost. Reducing portion sizes will be a health and bottom line boost to all concerned.
Analysis
Reducing portion sizes will not be easy however.
Menu display and offering mix and match dishes to give the appearance of no price change will be one way to survive.
Also reducing and substituting the menu to lower priced items when possible and revitalizing the menu with locally grown fruit and vegetables will be risky but long term will help.
Small restaurants with a good relationship and good communication with customers will be able to pull this off better with consumers than large chains.
All of these changes need to be clearly communicated. Pity the chain that makes wholesale menu changes without it. Or worse, makes no change but lowers quality to maintain price.
The era of searching far and wide to find low price and truck it in to a huge processing facility and then back out to the global chain is over.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
