Raising the Bar on Raising Menu Prices: Do’s and Don’ts

Global tariffs are shaking the food industry by making imported ingredients more expensive. Restaurants will feel the pinch, and if you plan on raising menu prices to cover these extra costs, doing it right is key.

The experts agree: from cheese and seafood to fruit and coffee, it’s all going to get more expensive. The National Coffee Association reports that less than 1% of the coffee Americans drink is homegrown. A lot of what food suppliers import can’t logistically be sourced in the US, so importing is the only way to get customers what they want.

Most businesses will have to cover costs by passing on some extra expenses to their customers. Navigating the effects of these tariffs will test many small and large businesses.

How tariffs affect food costs

If you missed Tariffs 101 in college (like half of Americans did), tariffs are basically taxes on imported goods. When your favorite high-quality ingredients cost more, your suppliers pass on those extra charges, increasing the food cost percentage.

According to Yale University, food prices will jump 2.8% due to President Trump’s tariffs. Bigger food suppliers will be able to ease into initial price hikes more easily than small suppliers, since they can only handle so much supply at once.

Companies big and small are already feeling the effects. Even before the pause on tariffs comes to an end, you might need to tweak your menu or source more locally to keep your costs in check.

The bottom line is to keep doing what you do best: serving great food while managing these rising expenses.

Keeping guests in the loop

When you have to raise prices, inform your customers beforehand. A quick note on your menu, website, or social media can go a long way in building trust. Explain that rising ingredient costs due to tariffs are behind the change, not just a price hike for the sake of profit.

Whether you’re running a cozy café or a bustling fine-dining spot, our guide will help you navigate these changes smoothly while maintaining your food quality and customer trust.

5 Do’s for raising menu prices

1. Tell them early:
   Give your customers a heads-up about the upcoming price changes. A short, clear message on your menu or online lets them know what to expect.
2. Keep it real:
   Be honest about why prices are going up. A simple explanation like “Due to rising costs on imported ingredients, we’re making a small change to our prices” is usually enough.
3. Emphasize quality:
   Remind your customers that your food quality stays the same and that the price change helps you keep serving the dishes they love.
4. Train your team:
   Make sure your staff understands the reasons for the price changes so they can confidently explain them to your guests.
5. Offer options:
   If possible, introduce some budget-friendly or value options to help those who might be more sensitive to price hikes.

5 Don’ts for raising menu prices

1. Don’t spring it on them:
   Don’t surprise customers with sudden changes. Gradual, well-communicated updates avoid sticker shock and build trust.
2. Don’t overcomplicate the message:
   Keep it simple — no need to dive deep into global economics. Stick to a straightforward explanation about rising costs.
3. Don’t cut quality:
   Don’t lower your standards or ingredients to hide the price increase. Your reputation for quality is what brings people back.
4. Don’t ignore feedback:
   Listen to what your customers say once the new prices are implemented. Their feedback can help you adjust your strategy if necessary.
5. Don’t act in isolation:
   Remember, rising prices are not your fault—they’re due to external factors. Use this opportunity to reduce waste or tweak portion sizes rather than just raising prices across the board.

Raising your menu prices because of global tariffs may be unavoidable, but you can manage it smoothly by being open and honest with your customers.

A friendly, straightforward message that explains the extra costs and shows your commitment to quality will help keep your diners on board. With a little planning and clear communication, you can rise above these challenges and keep your restaurant thriving.