price decrease

Lately, the restaurant industry buzz is all about price increases in the wake of rising commodity and fuel costs. Operators are determined to cover their costs, and want stakeholders to know that profit is the goal - in addition, of course, to guest service. I understand the need to achieve financial goals and stave off downward-turning profit. And it's true that a price change will have the most direct bottom-line impact of any marketing or finance decision a company can make. But there are some instances in which a price reduction may be warranted.

One quarter into the year, it seems that the optimistic notes that January brought with it are a thing of the past, and restaurant reality has set in. Operators are extremely concerned about the double whammy of rising fuel costs combined with increasing commodity costs. Add in the earthquake and tsunami in Japan and it's a triple whammy. So what's an operator to do? If the murmurings I hear are any indication, pricing analysis is now on the front burner for many restaurant operators. While that's not the only option available, it seems that it's one of the most popular.