Inflation… shudder. Everything is so expensive these days. From a simple tube of toothpaste to gas for your car, prices are soaring. Of course, your restaurant is no exception. The cost of food has skyrocketed, overheads have gone up, labor is pricey. The worst part is, there seems to be no end in sight.
In February of last year, the Consumer Price Index was somewhat acceptable 1.7% ahead of a year earlier. From then on, the year-over-year price increase rose consistently – 2.6% in March, 4.2% in April, 4.9% in May… the uptick continued and in December it hit a whopping 7%. This was the highest year-over-year since June 1982! Forecasts are bleak: economists expect inflation to keep soaring well into 2022.
The figures make you think about how you could run a successful restaurant in this context. When the going gets really tough you may be wondering if it is even possible to be successful right now.
While it may sound fantastical, there is a fairly simple tool you can use to navigate these rough times: a food ordering app. There is more to this marvel of technology than meets the eye. In addition to allowing customers to place orders (as the name suggests), a restaurant food ordering app offers numerous other crucial benefits that can help your restaurant combat the challenges of inflation.
01. They reduce your labor costs
A food ordering app is automated. Yes, that does sound like a redundancy, but the implications may not be so clear at first glance. When you open up the option for customers to order online, they will jump at it. Studies have revealed that over 80% of customers who order ahead prefer to do so through an app than by phone. When the number of phone orders go down, you will no longer need a designated phone operator. In fact, you will also not need people to process payment or communicate with the kitchen – the food ordering app takes care of all of that by integrating with your POS and kitchen display system.
Another rarely recognized function of the food ordering app is its utility for dine-in. Once seated, customers can whip out their phones, click away, and place the order. All your wait staff needs to do is collect the food and bring it to the table. This means you need fewer people per shift, which in turn means, you will be paying less for labor.
02. They reduce food costs
Food costs generally account for around 35% of a restaurant’s total costs. Sadly, a bulk of the food cost is a result of food wastage. If you can find a way to reduce wastage in your restaurants then you will definitely be able to bring down your overall food cost.
This is where a food ordering app comes in. By increasing the accuracy of the order, these apps help decrease the amount of food wastage. The notes facility allows your patrons to make special requests and customize their orders. Following these notes ensures the dishes are prepared to their liking and will not be returned. Customers get to review their order before confirming so they are certain of what they are asking for. Because the message gets relayed automatically to the kitchen, there is nothing lost in translation either. All-in-all, it is an error-free process that will reduce the amount of cooked food that is tossed out bringing down your food costs.
03. They help you make prudent pricing decisions
As a restaurant operator, you already know that online orders are more lucrative than in-person orders. Checks from online orders tend to be higher in value. Customers are also more likely to go for upsell and cross-sell options when they are presented digitally. However, these norms are not without their exception. Customers will not be ordering as much (or accepting any pairings or combos) if they feel that the prices are exorbitant.
Given the current context, you probably have no choice but to increase your prices – in fact, by the end of the third quarter of last year over 70% of restaurants had raised their prices. Most consumers have understood the need for this rise, but have also been put off when the hike has been very steep. So what you need to do is to price your menu items appropriately.
But how will you know what is appropriate? Food ordering apps that provide data analytics will give you some valuable insights into customer purchase patterns. You can learn about not just what customers buy, but more importantly, how they are buying, and this can be your guide on how to pitch your prices.
04. They help foster customer loyalty
A rewards or loyalty program is a powerful incentive for customers to make repeat purchases from a restaurant. Loyal customers bring in a sizeable chunk of a restaurant’s revenue – in most cases, up to 80% of total profits. Faced with increasing prices across the board, customers are more likely to stick with the restaurants that have a rewards program because they know that, as regulars, they will reap certain benefits. Therefore, the digital stamp card on your food ordering app will help keep those loyal customers coming back, bringing in much-needed business.
The key to facing the current surging inflation is to keep your costs down and increase your revenue. A food ordering app will assist you in achieving both. Before you dismiss it as yet another expense, consider this: food ordering apps are inexpensive. You do not need to purchase any extra hardware, you can simply set yours up using your existing computer. With your own custom-branded food ordering app, all you will have to pay is a flat monthly fee, which is also nominal. There are no damaging commissions like in a third-party aggregator. Given how much your restaurant stands to gain, the amount you fork out will seem negligible. Fortify your restaurant against inflation and get a food ordering app!