Getting menu prices right is one of the most critical decisions a restaurant can make—price too high and you lose the customer, price too low and you could lose margin. How can restaurants find the balance?
Setting profitable prices in the restaurant industry has never been more difficult. With rising food costs, increasing labor costs, and regulatory compliance costs, it’s crucial that restaurants price their menu items high enough that they can make a profit—but not so high as to lose competitiveness.
Making things even more complex, consumer food preferences are shifting, competition is intensifying, and new channels such as delivery and buy online, pick up in-store are emerging. So how can restaurants even stand a chance? Drumroll please…
Our Strategic Pricing Analyzer uses the latest in AI and machine learning to synthesize point-of-sale (POS), economic, and competitive data sources to set prices that can help maximize profits while protecting sales growth and customer loyalty. Let’s break that down a bit:
Glad you asked! Developed with one of the world’s leading restaurants, our tool is different from existing restaurant pricing solutions in four ways:
Oh! And did we mention that pilots can be launched within just a few weeks? And that full deployment can be reached within three to four months? By working quickly and efficiently, Deloitte Digital helps restaurants transform pricing systems into profit centers in just months.
As they say, the proof is in the pudding. So, let’s take a look at how Deloitte Digital recently worked with a leading restaurant chain to increase revenue.
We started by reviewing the current pricing process and defining business rules for recommendations. This allowed us to develop and tailor our Strategic Pricing Analyzer to suggest margin-maximizing price recommendations, while limiting negative impacts to check counts—which we rolled out to several thousand stores.
Our price recommendations align menu price with a consumer's willingness to pay, resulting in higher margins through optimized pricing, with little to no traffic decline.
To help ensure that you get the performance you anticipate, Deloitte Digital provides sales and profitability forecasts to track the performance of our recommendations.
On average, restaurants using the Deloitte solution achieve a 1-3 percentage point margin improvement that can translate directly into bottom line benefits.
Jean Chick, principal, US Restaurant & Food Service Leader, Deloitte Consulting LLP, supports clients through helping them navigate complex financial and operational issues while balancing change management and critical strategic considerations.
Georg Müller, managing director, Pricing Practice Leader, Deloitte Consulting LLP, helps clients develop and implement top-line margin improvement strategies in a variety of industries.
Evert Gruyaert, senior manager, Pricing Leader, Deloitte Consulting LLP, has deep experience in pricing and profitability management and helping his clients with profitable and sustainable growth.
