Price Increase Causes Confrontation

How do you raise the price of a menu item and not upset the customer? A Minnesota restaurant owner recently asked the question after experiencing a confrontational incident with a regular customer only weeks ago. The customer became so livid, claiming the price increase wasn't on the menu, that he almost bean a fight in the middle of the dining room with a waiter, the writer claimed.

After yelling and screaming the customer eventually calmed down and said he understood the $1.50 entrée increase, but, he promised to never, return.

We have all been faced with price increases, either at our own restaurants or when dining out and neither are easy to swallow. Yet, if tactfully done, the customer seldom complains about occasional price increases. The key word is occasional.

There are few steps to follow when considering a price increase. Make sure your food costs are accurate and you have spoken to your vendors about possible increases on the immediate future.

Use the percentage method and be sure to raise each price on the menu. Although your goal may be to cover a cost increase of only a handful of items, you don’t want to increase only one menu item while ignoring others – it tends to draw attention to the price increase. A minimal increase across the menu is often easier to accept than a huge increase on one item.

When raising prices make sure, the increase will be sufficient for the next six months. You do not want to raise prices more than that.

Consider increasing the cost of the daily specials a little more than the percentage increase of the set menu items. Specials often bring in the most profit of any item on the menu.

Do not put a note on the menu about increased gas, wages, rent, health insurance or the fact that Johnny and Buffy need to go to college as a reason for the price increase.  Nobody cares why prices are increased. It is part of doing business. As long as the increases are reasonable, good customers will accept it

Value verses cost is always important. Make sure that the customer is getting what they are paying for. Do not increase prices and cut back on the portion size.

Have your menus reprinted. Never put a piece of tape over an old price. Forget the little note in the corner of the menu notifying customers about the price increase.

When was the last time you walked into Macy’s, only to see a sign that read, “We’ve raised all of our shirt prices. We appreciate your business.”

Tell your staff about the prices increases. Let them know the reason why the increase is occurring and in a one-sentence paragraph, inform them on what to tell the customers. Something as simple as, “We haven’t had a price increase for the past two years and with the escalation of costs throughout the economy, we felt an increase was in order,” will suffice.

And, finally, if a customer does complain tell them you know how they must feel. Explain that you had the very same discussion with the owner of the gas station down the street a couple of times, last week.