Foodservice Costs on the Decline: How to Adapt Your Menu for Profitability

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The foodservice industry has faced a series of challenges in recent times. From supply chain disruptions to high food prices, restaurants, cafes, and other food businesses have had to adapt and innovate to survive. However, there’s some good news – a recent decrease in foodservice costs offers an opportunity to review menus and improve profitability. This blog post is your guide to navigating this new situation. We’ll explore the reasons behind the decline in foodservice costs, discuss strategies for adjusting your menu, and provide practical tips to increase your profit margins.

Why are Foodservice Costs Declining?

The good news is that after reaching a peak of 15% in early 2023, food inflation in the UK has dropped significantly to around 3.7%. This decline is attributed to several factors:

  • Price wars among supermarkets: Intense competition between major supermarkets has led to price cuts on various food items. This pressure trickles down the supply chain, ultimately impacting wholesale prices for foodservice businesses.
  • Improved supply chain management: Disruptions caused by the pandemic seem to be easing, with logistics companies and distributors streamlining their operations. This improved efficiency translates to lower transportation costs and a more consistent supply of ingredients.
  • Shifting consumer behaviour: As inflation affects other parts of their budget, consumers might be spending less on eating out. This could lead to a decrease in wholesale food demand, further driving down prices.

The Impact on Foodservice

As a foodservice professional, you may wonder how this trend affects your business. The lower food costs can present an opportunity to:

  1. Reduce menu prices: Lower ingredient costs may allow you to lower your menu prices without sacrificing profitability. This can help attract price-sensitive customers and boost sales.
  2. Improve profitability: If you choose to maintain your current menu prices, the lower food costs can directly improve your profit margins.
  3. Expand your menu offerings: Lower ingredient costs may allow you to experiment with new dishes or add premium items to your menu without breaking the bank.

Adapting Your Menu for Profitability

While the decline in foodservice costs is a positive development, it presents an opportunity to re-evaluate your menu and implement strategies to maximise profits. Here are some key considerations:

1. Menu Engineering:

Menu engineering is the strategic analysis of your menu items based on their profitability and popularity. With food costs changing, it’s time to revisit your menu through this lens.

  • Cost Analysis: Utilise food costing tools or manually calculate the cost of each menu item. Identify dishes with high food costs that may be impacting your bottom line. Consider reformulating them or exploring alternative ingredients.
  • Profit Margin Analysis: Anal e profit margin for each dish. This helps you to determine which item high-earns the most that might need adjustments in price or price.
  • Star-Cash Cow-Dog-Doorstop Analysis: This classic menu engineering technique categorises dishes based on their profit and popularity. Identify “stars” (popular and profitable), “cash cows” (high profit, low popularity), “dogs” (low profit, low popularity), and “doorstops” (high cost, low popularity). Promoting stars, revising dog recipes, and eliminating doorstops can improve your overall menu profitability.

2. Embrace Seasonal Ingredients:

Seasonal ingredients tend to be more readily available and often lower in price. Highlight seasonal produce on your menu to not only capitalize on lower costs but also offer fresh, exciting options for your customers. This approach aligns with the growing consumer interest in sustainable and local sourcing.

3. Portion Control:

Review portion sizes across your menu. Are they too generous, leading to unnecessary food waste and higher costs? Implementing standardized portion control helps optimize food usage and ultimately boosts your profit margin.

4. Offer Smaller Plates and Appetizers:

The trend of smaller plates and tapas-style dining continues to gain popularity. Consider introducing a section of smaller-sized portions or appetizers. This allows customers to explore a variety of dishes without overspending, while you benefit from potentially higher margins on smaller portions.

5. Promote Value Sets and Menu Bundles:

Value sets that combine an entree with a side and a drink can be a great way to attract customers and increase your average order value. Similarly, offering combo meals with bundled appetizers and desserts can incentivize additional purchases while creating a perception of value.

6. Leverage Technology:

Technology can be a powerful tool for menu optimization. Point-of-sale (POS) systems can provide valuable data on menu item sales and profitability. This data can inform your menu engineering efforts and help identify underperforming items. Additionally, online ordering platforms can streamline ordering and offer opportunities to highlight cost-effective menu options through targeted promotions.

7. Highlight Value and Transparency:

With inflation still affecting consumers’ wallets, emphasizing the value proposition of your menu becomes crucial. Promote dishes that offer high quality and ample portions at a fair price. Consider transparently mentioning the use of seasonal or local ingredients to further enhance the perception of value.

8. Don’t Skimp on Quality:

While cost reduction is important, maintaining high-quality ingredients is paramount to customer satisfaction and brand reputation. Instead of using lower-quality substitutes, focus on optimizing your recipes and portion control to achieve cost savings without compromising the food experience.

Communicating with Your Customers

As you adapt your menu to take advantage of lower food costs, don’t forget to communicate these changes to your customers. Use your website, social media channels, and in-store signage to highlight your value-oriented offerings and any new dishes you introduce. This can help attract new customers and keep your existing clientele engaged and excited about your menu.

Read More: The Power of Planning in a Busy Restaurant Environment


The recent supermarket price war and the resulting decline in food inflation present a unique opportunity for UK foodservice professionals. By understanding the impact of this trend and adapting your menu accordingly, you can improve your profitability, attract new customers, and solidify your position in the market. Remember to stay attuned to market trends and be proactive in your menu planning to stay ahead of the competition. So, keeping a close eye on food costs and adjusting your menu accordingly as the market continues to evolve is essential. With the right strategies in place, you can survive and thrive in this competitive industry. Keep innovating and experimenting with your menu to stay ahead of the curve and provide customers with an exceptional dining experience at a great value.

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