Margins Under Pressure? 5 Ways to Stay Profitable When Everything Costs More
Margins Under Pressure? 5 Ways to Stay Profitable When Everything Costs More
From the team at 5 Wards Services | www.5wardsservices.com
Eggs, meat, cheese, fryer oil, rent, wages… everything is more expensive.
And if you’re running a restaurant, food truck, café, or catering operation, you’re probably asking the same question every day:
How do I stay profitable without raising prices so high I scare customers away?
The key isn’t just charging more, it’s tightening operations and getting smart with costs.
Why Inflation Hits Food Businesses So Hard
Margins in food & beverage have always been thin. Add in post-pandemic labor demands, higher ingredient costs, and rising delivery platform fees, and suddenly that “busy night” doesn’t feel very profitable.
What used to be a 12–15% margin is now 6–8%…or worse, negative.
But with smart tweaks to purchasing, portioning, pricing, and reporting, you can get control of your numbers again.
5 Moves to Tighten Margins Without Losing Guests
1. Run Weekly (Not Monthly) Cost of Goods Reports
You can’t fix what you don’t track. Waiting for end-of-month reports = death by 1,000 cuts.
Track every week:
Food Cost % = (Food Used ÷ Food Sales)
Compare against your menu pricing
Investigate spikes immediately
Use simple spreadsheets or software like MarginEdge, MarketMan, or Toast.
2. Highlight High-Margin Menu Items (and Train Staff to Sell Them)
Every menu has silent heroes, dishes with low cost and high perceived value.
Examples:
Pasta
Chicken wings
Vegetarian options
House cocktails
Menu Design Tip: Put those in prime visual spots, use boxes, icons, or call-outs. Train servers to recommend them with upsells.
3. Shrink Portions Strategically (Not Everything, Just Smart Swaps)
Don’t reduce portions across the board, that feels cheap. Instead:
Shrink side dishes (fries, bread, salad)
Reduce protein by 1–2 oz, but present with more sauce, garnish, or starch
Use smaller plates to maintain visual appeal
Most customers don’t notice. Your food cost will.
4. Renegotiate with Vendors Quarterly
Prices fluctuate, and many vendors don’t tell you when it drops.
Compare at least two suppliers for key items
Ask about volume discounts or substitutions
Join a purchasing group (restaurant co-ops, GPOs) if you can
Get quotes from new vendors every 6 months—even if you don’t switch
Loyalty is great—but so is your bottom line.
5. Reduce Waste with Better Prep & Labeling Systems
A great prep sheet = thousands saved over a year.
Label everything with date, time, initials
FIFO (First In, First Out) should be non-negotiable
Cross-utilize ingredients across multiple dishes
Train kitchen staff on batch cooking, portion scooping, and spoilage tracking
Pro Tip: The best kitchens waste less than 3–4%. Track spoilage weekly.
You Don’t Need a New Menu… You Need a Tighter System
Inflation isn’t going away soon. But with tighter inventory control, smart pricing, and weekly margin tracking, your business can stay lean, profitable, and competitive.
At 5 Wards Services, we help small restaurant and hospitality teams build systems that protect profits, without killing the customer experience. Our content library includes menu margin calculators, weekly inventory templates, and food cost trackers made for operators like you.
