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3 ways to minimize the impact of pricing volatility
Restaurant supply chain prices might as well be on springs with their endless cycles of ups and downs., with mostly ups. Whatever the causes for all this price volatility may be though, this is definitely a time when the restaurants with the best tools — as in revenue and operations management tools — will win.
July 15, 2021 by Paul Radley — Marketing Manager, Qu POS
As restaurateurs are well aware, prices for just about every basic required for business are up. And, in some cases, they're way up.
Pandemic supply chain disruptions — even as COVID-19 fears ebb — have caused some of these skyrocketing prices. But, a range of other factors, from more expensive gasoline, higher commodity prices and even a trucker shortage, are all contributing to current stratospheric price hikes.
Whatever the causes for all this price volatility may be though, this is definitely a time when the restaurants with the best tools — as in revenue and operations management tools — will win. And coming out of the gate now well-equipped could make the difference between long-term survival and brand expansion and … well, not so much.
This process begins by asking three questions about your brand currently, as follows:
- How have prior disruptions impacted my business?
- What are the things I can do to reduce business impact at this time?
- How can I get ahead of change, instead of falling victim to it?
Change happens ... but now, it's happening faster
Although the pandemic has undeniably impacted every aspect of restaurant operation more than any other force in recent memory, one area where change has been particularly notable is in restaurant technology.
To survive during COVID-19, brands transitioned their focus by turning to technology to handle a new operational reality. Some made the shift swiftly, while others did not, with the brands that were using lighter, open and versatile technology stacks most capable of responding quickly during the early days of the pandemic. Meanwhile, their heavier, non-integrated counterparts, struggled and were unable to capitalize on the accelerated shift to digital.
Flash-forward to the current day when the complete lifting of pandemic-era restrictions is coming well into view. Now though, increasingly volatile commodity prices are looming over brands. But again, the right technology is still pushing some brands ahead of the pack because they are better able to quickly adapt to new circumstances and prepare for coming changes.
So, to that end you may ask what a restaurant technology stack that's prepared for change looks like? Here are some defining characteristics:
- It unifies by including POS, enterprise management tools, ordering channels and operational platforms.
- It's flexible, with an open architecture that encourages easy, normalized data-flow within your ecosystem.
- It can shift with the changes in that the applications and tools permit proactive and reactive changes as business conditions change.
Of course, uncertainty in many areas of the restaurant industry can't be managed by technology alone. But, having the right tech helps brands handle turbulence and alleviate repercussions related to external factors that have a direct impact on their business.
For instance, brands are wise to consider an enterprise management system tool that can manage stores, menus and pricing dynamically, reducing the amount of time and effort required to maintain consistency. This tools also allows brands to get ahead of things like price increases.
Additionally, your brand's system should be set to receive valuable updates that will further simplify price management in ways like:
- Versioning, which reduces the number of items and prices that need to be managed within the system. This decreases the number of "versions" within the tool, easing the need for long-term maintenance. This is particularly useful when updating pricing across a technology stack, especially when there are multiple ordering channels to manage.
- Grouping, which allows brand to assign prices to groups of items. This update can be thought of as a "price book," meaning that restaurants can assign one price across multiple items and item versions. All prices can be grouped together outside of a menu structure, making them easier and faster to update, allowing restaurants to respond quickly when prices go up or down.
So while external factors like supply chain disruptions, droughts and global pandemics are beyond a restaurant's control, having the right mindset, tools and technology gives brands the ability to mitigate the impact of events like pricing increases, and can potentially make the difference between getting ahead of change and becoming a casualty of it.
It's critical for restaurants to think ahead of potential changes that may be coming down the horizon, particularly in light of increased competition and the unparalleled convenience at guests' fingertips. The right preparation and approach can equip brands to reduce the impact of volatility while making the right moves afterward can help brands truly pull ahead of their competition.
About Paul Radley
Included In This Story
Qu
Qu is the restaurant technology company evolving POS, responsibly, for a more sustainable future. With the industry’s first unified commerce platform, Qu’s fully integrated products go beyond fragmented ordering and tech experiences to create healthier connections for restaurant operating teams and their many stakeholders.
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