Menus Shrink As Restaurants Struggle With Skyrocketing Prices, Staff Shortages

Restaurants are limiting the options on their menus in response to employee shortages and the skyrocketing prices of ingredients. 

As reported by The Wall Street Journal, “This year, 60% of restaurants reported reducing their menu size, according to Datassential, a food-industry market-research firm that studied more than 4,800 menus in the U.S.”

“The menus at fine-dining establishments were hit especially hard, with the number of items declining 23% over 2021, says Datassential’s Sean Jafar, who studies menu trends. The consumer-price index for food away from home, which includes purchases from restaurants, rose 5.8% over the past year, the largest 12-month increase since 1982, according to Bureau of Labor Statistics data.”

As noted by The Journal: 

Restaurant menus often expand and shrink with the economy. Many menus shrank after the onset of the 2009 recession, but expanded as business came back, Datassential’s Mr. Jafar says. The number of menu items can tick up or down by roughly 10% depending on the year, but he says most restaurants haven’t experienced the huge swings associated with the pandemic.

Restaurants moved to implement simpler menus during the pandemic, as well, and the trend could be continuing as supply chain issues affect consumers and business owners alike.

CNN reported on the smaller menu sizes being carried out in restaurants across the country in June of 2020. 

John Dillon, chief brand officer for Denny’s, said in an emailed statement to CNN Business at the time, “When we realized the effects of the pandemic we quickly mobilized to create a new streamlined menu,” adding that the company was serving dishes that “simplify operations and [are] easier to execute for our team members.”

This trend has been ongoing for some time and is a tactic sometimes used by restaurants for creativity and marketing. However, it might be turning into a long-term strategy.  

“The longer the menu, the more costly it is to maintain,” said Gordon Food Service Corporate Consulting Chef Gerry Ludwig, CEC, in an industry article by Gordon Food Service.

“A smaller menu allows you to streamline your inventory. Fewer dishes are less complicated for the kitchen to execute,” Ludwig noted. “Consistency is easier to maintain. Faster inventory turnover means fresher ingredients.”

The scarcity of available workers is also contributing to the issue.

According to the National Restaurant Association’s 2021 State of the Restaurant Industry Mid-Year Update, “3 in 4 operators say recruitment and retention is their toughest challenge despite employment gains.”

The report, which was released in September, also noted: 

Restaurant sales are on the rise.Wholesale food prices are trending sharply higher. A first in its 54-year history, the Bureau of Labor Statistics index registered gains above 2% in 3 consecutive months.Menu prices trended higher due to higher food, labor and fuel costs.Case rise of the COVID-19 delta variant is impacting restaurant visits.

According to the Bureau of Labor Statistics’ recent report, the “food index increased 0.7 percent in November after rising 0.9 percent in both September and October. The food at home index increased 0.8 percent in November as all six major grocery store food group indexes rose; this was the third consecutive month that all six increased.”

The rise in prices is not only affecting American families and individuals, but is pushing business owners to make their own decisions on what items they can afford to sell to consumers, and how they will be able to keep their companies going as Americans begin to potentially cut back on their spending once again. 

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